filings.toolsItem 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL STATEMENTS
Linde’s consolidated financial statements are prepared by management, which is responsible for their fairness, integrity and objectivity. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applied on a consistent basis, except for accounting changes as disclosed, and include amounts that are estimates and judgments. All historical financial information in this annual report is consistent with the accompanying financial statements.
Linde maintains accounting systems, including internal accounting controls, monitored by a staff of internal auditors, that are designed to provide reasonable assurance of the reliability of financial records and the protection of assets. The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits. The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management. In compliance with Section 404 of the Sarbanes-Oxley Act of 2002, Linde assessed its internal control over financial reporting and issued a report (see below).
The Audit Committee of the Board of Directors, which consists solely of non-employee directors, is responsible for overseeing the functioning of the accounting system and related controls and the preparation of annual financial statements. The Audit Committee periodically meets with management, internal auditors and the independent registered public accounting firm to review and evaluate their accounting, auditing and financial reporting activities and responsibilities, including management’s assessment of internal control over financial reporting. The independent registered public accounting firm and internal auditors have full and free access to the Audit Committee and meet with the committee, with and without management present.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Linde’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including the company’s principal executive officer and principal financial officer, the company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (often referred to as COSO). Based on this evaluation, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2025.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited and issued their opinion on the effectiveness of the company’s internal control over financial reporting as of December 31, 2025 as stated in their report.
| /s/ SANJIV LAMBA | /s/ KELCEY E. HOYT | |||||||
| Sanjiv Lamba Chairman and Chief Executive Officer | Kelcey E. Hoyt Chief Accounting Officer | |||||||
| /s/ MATTHEW J. WHITE | ||||||||
| Matthew J. White Chief Financial Officer | February 25, 2026 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Linde plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Linde plc and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition - Estimated Costs at Completion
As described in Note 19 to the consolidated financial statements, $2,250 million of the Company’s total revenues for the year ended December 31, 2025 was generated from sale of equipment contracts. Sales of equipment contracts are generally comprised of a single performance obligation. Revenue from sale of equipment is generally recognized over time as the Company has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as cumulative adjustments for the inception-to-date effect of such change.
The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs at completion is a critical audit matter are (i) the significant judgment by management when developing the estimated costs at completion for sale of equipment contracts; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the estimated costs at completion and management’s significant assumptions related to the total estimated material and labor costs; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over developing the estimated costs at completion for sale of equipment contracts. These procedures also included, among others, evaluating and testing management’s process for developing the estimated costs at completion for sale of equipment contracts, which included evaluating the reasonableness of management’s significant assumptions related to the total estimated material and labor costs. Evaluating the reasonableness of management’s significant assumptions involved evaluating management’s ability to reasonably estimate costs at completion for sale of equipment contracts on a sample basis by (i) performing a comparison of the originally estimated and actual costs incurred on similar completed equipment contracts, and (ii) evaluating the timely identification of circumstances that may warrant a modification to estimated costs at completion, including actual costs in excess of estimates. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of management’s estimates and significant assumptions related to the total estimated material and labor costs.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
February 25, 2026
We have served as the Company’s or its predecessor’s auditor since 1992.
CONSOLIDATED STATEMENTS OF INCOME
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions, except per share data)
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Sales | $ | 33,986 | $ | 33,005 | $ | 32,854 | |||||||||||
| Cost of sales, exclusive of depreciation and amortization | 17,389 | 17,143 | 17,492 | ||||||||||||||
| Selling, general and administrative | 3,433 | 3,337 | 3,295 | ||||||||||||||
| Depreciation and amortization | 3,763 | 3,780 | 3,816 | ||||||||||||||
| Research and development | 147 | 150 | 146 | ||||||||||||||
| Cost reduction program and other charges | 273 | 145 | 40 | ||||||||||||||
| Other income (expense) - net | (58) | 185 | (41) | ||||||||||||||
| Operating Profit | 8,923 | 8,635 | 8,024 | ||||||||||||||
| Interest expense - net | 255 | 256 | 200 | ||||||||||||||
| Net pension and OPEB cost (benefit), excluding service cost | (229) | (190) | (164) | ||||||||||||||
| Income Before Income Taxes and Equity Investments | 8,897 | 8,569 | 7,988 | ||||||||||||||
| Income taxes | 1,989 | 2,002 | 1,814 | ||||||||||||||
| Income Before Equity Investments | 6,908 | 6,567 | 6,174 | ||||||||||||||
| Income from equity investments | 150 | 170 | 167 | ||||||||||||||
| Net Income (Including Noncontrolling Interests) | 7,058 | 6,737 | 6,341 | ||||||||||||||
| Less: noncontrolling interests | (160) | (172) | (142) | ||||||||||||||
| Net Income – Linde plc | $ | 6,898 | $ | 6,565 | $ | 6,199 | |||||||||||
| Per Share Data – Linde plc Shareholders | |||||||||||||||||
| Basic earnings per share | $ | 14.69 | $ | 13.71 | $ | 12.70 | |||||||||||
| Diluted earnings per share | $ | 14.61 | $ | 13.62 | $ | 12.59 | |||||||||||
| Weighted Average Shares Outstanding (000’s): | |||||||||||||||||
| Basic shares outstanding | 469,488 | 478,773 | 488,191 | ||||||||||||||
| Diluted shares outstanding | 472,195 | 482,092 | 492,290 |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions)
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| NET INCOME (INCLUDING NONCONTROLLING INTERESTS) | $ | 7,058 | $ | 6,737 | $ | 6,341 | |||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||
| Translation adjustments: | |||||||||||||||||
| Foreign currency translation adjustments | 714 | (1,638) | 399 | ||||||||||||||
| Reclassifications to net income | (80) | — | — | ||||||||||||||
| Income taxes | 12 | 6 | 1 | ||||||||||||||
| Translation adjustments | 646 | (1,632) | 400 | ||||||||||||||
| Funded status - retirement obligations (Note 16): | |||||||||||||||||
| Retirement program remeasurements | 60 | 674 | (480) | ||||||||||||||
| Reclassifications to net income | (28) | — | (14) | ||||||||||||||
| Income taxes | (7) | (155) | 114 | ||||||||||||||
| Funded status - retirement obligations | 25 | 519 | (380) | ||||||||||||||
| Derivative instruments (Note 12): | |||||||||||||||||
| Current year unrealized gain (loss) | 53 | (38) | (80) | ||||||||||||||
| Reclassifications to net income | (23) | 22 | 13 | ||||||||||||||
| Income taxes | (8) | 3 | 12 | ||||||||||||||
| Derivative instruments | 22 | (13) | (55) | ||||||||||||||
| TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 693 | (1,126) | (35) | ||||||||||||||
| COMPREHENSIVE INCOME (INCLUDING NONCONTROLLING INTERESTS) | 7,751 | 5,611 | 6,306 | ||||||||||||||
| Less: noncontrolling interests | (192) | (135) | (130) | ||||||||||||||
| COMPREHENSIVE INCOME - LINDE PLC | $ | 7,559 | $ | 5,476 | $ | 6,176 |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED BALANCE SHEETS
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions)
| December 31, | 2025 | 2024 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 5,056 | $ | 4,850 | |||||||
| Accounts receivable - net | 4,966 | 4,622 | |||||||||
| Contract assets | 269 | 263 | |||||||||
| Inventories | 2,055 | 1,946 | |||||||||
| Prepaid and other current assets | 979 | 1,264 | |||||||||
| Total Current Assets | 13,325 | 12,945 | |||||||||
| Property, plant and equipment - net | 28,260 | 24,775 | |||||||||
| Equity investments | 2,015 | 2,130 | |||||||||
| Goodwill | 27,927 | 25,937 | |||||||||
| Other intangible assets – net | 11,871 | 11,330 | |||||||||
| Other long-term assets | 3,419 | 3,030 | |||||||||
| Total Assets | $ | 86,817 | $ | 80,147 | |||||||
| Liabilities and Equity | |||||||||||
| Accounts payable | $ | 2,810 | $ | 2,507 | |||||||
| Short-term debt | 4,510 | 4,223 | |||||||||
| Current portion of long-term debt | 1,796 | 2,057 | |||||||||
| Contract liabilities | 1,231 | 1,194 | |||||||||
| Accrued taxes | 680 | 637 | |||||||||
| Other current liabilities | 4,171 | 3,926 | |||||||||
| Total Current Liabilities | 15,198 | 14,544 | |||||||||
| Long-term debt | 20,683 | 15,343 | |||||||||
| Other long-term liabilities | 4,355 | 4,015 | |||||||||
| Deferred credits | 6,840 | 6,757 | |||||||||
| Total Liabilities | 47,076 | 40,659 | |||||||||
| Commitments and contingencies (Note 17) | |||||||||||
| Redeemable noncontrolling interests | 13 | 13 | |||||||||
| Linde plc Shareholders’ Equity: | |||||||||||
| Ordinary shares, €0.001 par value, authorized 1,750,000,000 shares, 2025 and 2024 issued: 490,766,972 ordinary shares | 1 | 1 | |||||||||
| Additional paid-in capital | 39,430 | 39,603 | |||||||||
| Retained earnings | 16,608 | 12,634 | |||||||||
| Accumulated other comprehensive income (loss) | (6,233) | (6,894) | |||||||||
| Less: Treasury shares, at cost (2025 – 27,086,030 shares and 2024 – 17,530,240 shares) | (11,561) | (7,252) | |||||||||
| Total Linde plc Shareholders’ Equity | 38,245 | 38,092 | |||||||||
| Noncontrolling interests | 1,483 | 1,383 | |||||||||
| Total Equity | 39,728 | 39,475 | |||||||||
| Total Liabilities and Equity | $ | 86,817 | $ | 80,147 |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
LINDE PLC AND SUBSIDIARIES
(Millions of dollars)
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Increase (Decrease) in Cash and Cash Equivalents | |||||||||||||||||
| Operations | |||||||||||||||||
| Net income – Linde plc | $ | 6,898 | $ | 6,565 | $ | 6,199 | |||||||||||
| Add: Noncontrolling interests | 160 | 172 | 142 | ||||||||||||||
| Net Income (including noncontrolling interests) | $ | 7,058 | $ | 6,737 | $ | 6,341 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Cost reduction program and other charges | 139 | 31 | (118) | ||||||||||||||
| Depreciation and amortization | 3,763 | 3,780 | 3,816 | ||||||||||||||
| Deferred income taxes | (465) | (142) | (84) | ||||||||||||||
| Share-based compensation | 164 | 160 | 141 | ||||||||||||||
| Non-cash charges and other | 23 | (72) | 43 | ||||||||||||||
| Working capital | |||||||||||||||||
| Accounts receivable | (122) | (160) | (86) | ||||||||||||||
| Contract assets and liabilities, net | (72) | (409) | (168) | ||||||||||||||
| Inventory | 47 | 56 | (127) | ||||||||||||||
| Prepaid and other current assets | 55 | (55) | 66 | ||||||||||||||
| Payables and accruals | (148) | (277) | (168) | ||||||||||||||
| Pension contributions | (25) | (35) | (46) | ||||||||||||||
| Long-term assets, liabilities and other | (67) | (191) | (305) | ||||||||||||||
| Net cash provided by operating activities | 10,350 | 9,423 | 9,305 | ||||||||||||||
| Investing | |||||||||||||||||
| Capital expenditures | (5,261) | (4,497) | (3,787) | ||||||||||||||
| Acquisitions, net of cash acquired | (412) | (317) | (953) | ||||||||||||||
| Divestitures, net of cash divested and asset sales | 42 | 170 | 70 | ||||||||||||||
| Other investing, net | (90) | — | — | ||||||||||||||
| Net cash used for investing activities | (5,721) | (4,644) | (4,670) | ||||||||||||||
| Financing | |||||||||||||||||
| Short-term debt borrowings (repayments) – net | 41 | (372) | 554 | ||||||||||||||
| Long-term debt borrowings | 5,148 | 4,844 | 2,188 | ||||||||||||||
| Long-term debt repayments | (2,278) | (1,305) | (1,682) | ||||||||||||||
| Issuances of ordinary shares | 23 | 31 | 33 | ||||||||||||||
| Purchases of ordinary shares | (4,601) | (4,482) | (3,958) | ||||||||||||||
| Cash dividends - Linde plc shareholders | (2,811) | (2,655) | (2,482) | ||||||||||||||
| Noncontrolling interest transactions and other | (76) | (420) | (53) | ||||||||||||||
| Net cash used for financing activities | (4,554) | (4,359) | (5,400) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 131 | (234) | (7) | ||||||||||||||
| Change in cash and cash equivalents | 206 | 186 | (772) | ||||||||||||||
| Cash and cash equivalents, beginning-of-period | 4,850 | 4,664 | 5,436 | ||||||||||||||
| Cash and cash equivalents, end-of-period | $ | 5,056 | $ | 4,850 | $ | 4,664 | |||||||||||
| Supplemental Data | |||||||||||||||||
| Interest paid, net of capitalized interest | $ | 548 | $ | 443 | $ | 451 |
The accompanying Notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF EQUITY
LINDE PLC AND SUBSIDIARIES
(Dollar amounts in millions, except per share data, shares in thousands)
| Linde plc Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ordinary shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) (Note 7) | Treasury Stock | Linde plc Shareholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Activity | Shares | Amounts | Shares | Amounts | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 552,013 | $ | 1 | $ | 40,005 | $ | 20,541 | $ | (5,782) | 59,555 | $ | (14,737) | $ | 40,028 | $ | 1,346 | $ | 41,374 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income available for Linde plc shareholders | 6,199 | 6,199 | 142 | 6,341 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (23) | (23) | (12) | (35) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and other capital reductions | — | (113) | (113) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additions (Reductions) | $ | (12) | (12) | (1) | (13) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends ($5.10 per ordinary share) | (2,482) | (2,482) | (2,482) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuances of ordinary shares: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For employee savings and incentive plans | (322) | (113) | (924) | 307 | (128) | (128) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of ordinary shares | 10,937 | (4,003) | (4,003) | (4,003) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 141 | 141 | 141 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intercompany reorganization (Note 14) | (61,246) | (15,300) | (61,246) | 15,300 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 490,767 | $ | 1 | $ | 39,812 | $ | 8,845 | $ | (5,805) | 8,322 | $ | (3,133) | $ | 39,720 | $ | 1,362 | $ | 41,082 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income available for Linde plc shareholders | 6,565 | 6,565 | 172 | 6,737 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (1,089) | (1,089) | (37) | (1,126) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and other capital reductions | — | (133) | (133) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additions (Reductions) | — | 19 | 19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends ($5.56 per ordinary share) | (2,655) | (2,655) | (2,655) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuances of ordinary shares: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For employee savings and incentive plans | (369) | (121) | (868) | 340 | (150) | (150) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of ordinary shares | 10,076 | (4,459) | (4,459) | (4,459) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 160 | 160 | 160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 490,767 | $ | 1 | $ | 39,603 | $ | 12,634 | $ | (6,894) | 17,530 | $ | (7,252) | $ | 38,092 | $ | 1,383 | $ | 39,475 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income available for Linde plc shareholders | 6,898 | 6,898 | 160 | 7,058 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 661 | 661 | 32 | 693 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends and other capital reductions | — | (119) | (119) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additions (Reductions) | (4) | (4) | 27 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends ($6.00 per ordinary share) | (2,811) | (2,811) | (2,811) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuances of ordinary shares: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For employee savings and incentive plans | (333) | (113) | (706) | 297 | (149) | (149) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of ordinary shares | 10,262 | (4,606) | (4,606) | (4,606) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 164 | 164 | 164 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | 490,767 | $ | 1 | $ | 39,430 | $ | 16,608 | $ | (6,233) | 27,086 | $ | (11,561) | $ | 38,245 | $ | 1,483 | $ | 39,728 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying Notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LINDE PLC AND SUBSIDIARIES
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Linde plc ("Linde" or "the company") is an incorporated public limited company formed under the laws of Ireland. Linde’s registered office is located at Ten Earlsfort Terrace, Dublin 2, D02 T380 Ireland. Linde’s principal executive offices are located at Forge, 43 Church Street West, Woking, Surrey GU21 6HT, United Kingdom and 10 Riverview Drive, Danbury, Connecticut, 06810, United States. Linde trades on the Nasdaq under the symbol LIN.
Principles of Consolidation – The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of all significant subsidiaries where control exists and, in limited situations, variable-interest entities where the company is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation and any significant related-party transactions have been disclosed.
Equity investments generally consist of 20% to 50% owned operations where the company exercises significant influence, but does not have control. Income from equity investments in corporations is reported on an after-tax basis. Pre-tax income from equity investments that are partnerships or limited-liability corporations is included in other income (expenses) – net with related taxes included in Income taxes. Equity investments are reviewed for impairment whenever events or circumstances reflect that an impairment loss may have been incurred.
Changes in ownership interest that result either in consolidation or deconsolidation of an investment are recorded at fair value through earnings, including the retained ownership interest, while changes that do not result in either consolidation or deconsolidation of a subsidiary are treated as equity transactions.
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While actual results could differ, management believes such estimates to be reasonable.
Operations – Linde is the largest industrial gases company globally. The company produces, sells and distributes atmospheric, process and specialty gases to a diverse group of industries including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, and metals. Linde’s Engineering business offers its customers an extensive range of gas production and processing services including supplying plant components and services directly to customers.
Revenue Recognition – Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which the company expects to be entitled to receive in exchange for the goods or services. See Note 19 for additional details regarding Linde's revenue recognition policies.
Cash Equivalents – Cash equivalents are considered to be highly liquid securities with original maturities of three months or less.
Inventories – Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average-cost method.
Property, Plant and Equipment – Net – Property, plant and equipment are carried at cost, net of accumulated depreciation. The company capitalizes labor, applicable overhead and interest as part of the cost of constructing major facilities. Expenditures for additions and improvements that extend the lives or increase the capacity of plant assets are also capitalized. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 years to 40 years (see Note 8). Linde uses accelerated depreciation methods for tax purposes where appropriate. Maintenance of property, plant and equipment is generally expensed as incurred.
The company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value may be required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.
Asset-Retirement Obligations – An asset-retirement obligation is recognized in the period in which sufficient information exists to determine the fair value of the liability with a corresponding increase to the carrying amount of the related property, plant and equipment which is then depreciated over its useful life. The liability is initially measured at fair
value and then accretion expense is recorded in each subsequent period. The company’s asset-retirement obligations are primarily associated with its on-site long-term supply arrangements where the company has built a facility on land leased from the customer and is obligated to remove the facility at the end of the contract term. The company's asset-retirement obligations are not material to its consolidated financial statements.
Foreign Currency Translation – For most foreign operations, the local currency is the functional currency and translation gains and losses are reported as part of the accumulated other comprehensive income (loss) component of equity as a cumulative translation adjustment (see Note 7).
Financial Instruments – Linde enters into various derivative financial instruments to manage its exposure to fluctuating interest rates, currency exchange rates, commodity pricing and energy costs. Such instruments primarily include interest-rate swap and treasury rate lock agreements, forward contracts, and commodity-swap agreements. These instruments are not entered into for trading purposes. Linde only uses commonly traded and non-leveraged instruments.
There are three types of derivatives the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.
When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Linde designates all interest-rate and treasury rate locks as hedges for accounting purposes when used. Currency contracts are generally not designated as hedges for accounting purposes. However, currency contracts related to certain forecasted transactions and net investments in foreign-denominated subsidiaries are designated as hedges for accounting purposes. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, then hedge accounting will be discontinued prospectively.
Changes in the fair value of derivatives designated as fair-value hedges are recognized in earnings as an offset to the change in the fair values of the underlying exposures being hedged. The changes in fair value of derivatives that are designated as cash-flow hedges are deferred in accumulated other comprehensive income (loss) and are reclassified to earnings as the underlying hedged transaction affects earnings. Provided the hedge remains highly effective, any ineffectiveness is deferred in accumulated other comprehensive income (loss) and is reclassified to earnings as the underlying hedged transaction affects earnings. Hedges of net investments in foreign subsidiaries are recognized in the cumulative translation adjustment component of accumulated other comprehensive income (loss) on the consolidated balance sheets to offset translation gains and losses associated with the hedged net investment. Derivatives that are entered into for risk-management purposes and are not designated as hedges (primarily related to currency derivatives other than for firm commitments) are recorded at their fair market values and recognized in current earnings.
See Note 12 for additional information relating to financial instruments.
Goodwill – Acquisitions are accounted for using the acquisition method which requires allocation of the purchase price to assets acquired and liabilities assumed based on estimated fair values. Any excess of the purchase price over the fair value of the assets and liabilities acquired is recorded as goodwill. Allocations of the purchase price are based on preliminary estimates and assumptions at the date of acquisition and are subject to revision based on final information received, including appraisals and other analyses which support underlying estimates.
The company performs a goodwill impairment test annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. The impairment test allows an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than carrying value then the company will estimate and compare the fair value of its reporting units to their carrying value, including goodwill. Reporting units are determined based on one level below the operating segment level. The qualitative analysis of goodwill for the year ended December 31, 2025 showed the fair value of the reporting units substantially exceeded the carrying value, as such further analysis was not performed.
See Note 9 for additional information relating to goodwill.
Other Intangible Assets – Other intangible assets, primarily customer relationships, are amortized over the estimated period of benefit. The determination of the estimated period of benefit will be dependent upon the use and underlying
characteristics of the intangible asset. Linde evaluates the recoverability of its intangible assets subject to amortization when facts and circumstances indicate that the carrying value of the asset may not be recoverable. If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its estimated fair value. Fair value is generally estimated based on either appraised value or other valuation techniques. Indefinite lived intangible assets related to the Linde brand are evaluated for impairment on an annual basis or more frequently if events or circumstances indicate an impairment loss may have occurred.
See Note 10 for additional information relating to other intangible assets.
Income Taxes – Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using currently enacted tax rates. Valuation allowances are established against deferred tax assets whenever circumstances indicate that it is more likely than not that such assets will not be realized in future periods.
Under the guidance for accounting for uncertainty in income taxes, the company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the financial statements.
See Note 5 for additional information relating to income taxes.
Retirement Benefits – Most Linde employees participate in a form of defined benefit or contribution retirement plan, and additionally certain employees are eligible to participate in various post-employment health care and life insurance benefit plans. The cost of contribution plans is recognized in the year earned while the cost of other plans is recognized over the employees’ expected service period to the company, all in accordance with the applicable accounting standards. The funded status of the plans is recorded as an asset or liability in the consolidated balance sheets. Funding of retirement benefits varies and is in accordance with local laws and practices.
See Note 16 for additional information relating to retirement programs.
Share-based Compensation*–* The company has historically granted share-based awards which consist of stock options, restricted stock and performance-based stock. Share-based compensation expense is generally recognized on a straight-line basis over the stated vesting period. For stock awards granted to full-retirement-eligible employees, compensation expense is recognized over the period from the grant date to the date retirement eligibility is achieved. For performance-based awards, compensation expense is recognized only if it is probable that the performance condition will be achieved.
See Note 15 for additional disclosures relating to share-based compensation.
Reclassifications – Certain prior years’ amounts have been reclassified to conform to the current year’s presentation.
Recently Issued Accounting Standards
Accounting Standards Implemented in 2025
Improvements to Income Tax Disclosures - In December 2023, the FASB issued guidance requiring enhanced disclosure related to income taxes. The standard requires additional or modified disclosures related to the income tax rate reconciliation, disaggregation of income taxes paid, and several other disclosures. The new standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this standard impacted disclosures within the company's consolidated financial statements. Linde has adopted this guidance retrospectively for fiscal year 2025 (see Note 5).
Accounting Standards to be Implemented
Disaggregation of Income Statement Expenses - In November 2024, the FASB issued guidance requiring disaggregated disclosure of income statement expenses. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years after December 15, 2027, with early adoption permitted. The standard can be applied either prospectively after the effective date or retrospectively to any or all periods presented. The adoption of this standard will only impact disclosures within the company's consolidated financial statements and the company is evaluating the impact this guidance will have on those disclosures.
Targeted Improvements to the Accounting for Internal-Use Software - In September 2025, the FASB issued guidance that amends the existing standard for internal-use software by removing the software development project stage model and introducing a recognition and capitalization framework to reflect current software development practices. The new standard is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The standard can be applied prospectively, retrospectively, or via a modified prospective transition method. The adoption of this standard is not expected to have a material impact on the financial statements.
NOTE 2. ACQUISITIONS AND DIVESTITURES
Acquisitions
The fair value of purchase consideration for acquisitions, net of cash acquired was $412 million, $317 million and $953 million for the years ended December 31, 2025, 2024 and 2023, respectively. Acquisitions in 2025 primarily related to APAC and EMEA. Acquisitions in 2024 and 2023 primarily related to the Americas.
2023 Acquisition of nexAir, LLC
On January 5, 2023, Linde completed the acquisition of nexAir, LLC, a gas distribution and welding supply company in the United States, in order to further expand the company’s geographic footprint into different regions. Prior to completion of the acquisition, Linde held a 23% interest in nexAir, LLC. Pursuant to a signed purchase agreement between Linde and nexAir, LLC, Linde purchased the remaining 77% ownership interest in an all cash transaction with a total purchase price of $866 million, or $811 million net of cash acquired. The fair value of Linde’s equity interest in nexAir, LLC immediately preceding the acquisition date was $183 million, which resulted in a gain on remeasurement of the company’s previously held equity interest which was not material; this gain is recorded within “Other income (expense) – net” on the consolidated statements of income.
Final Allocation of Purchase Price
The acquisition of nexAir, LLC was accounted for as a business combination. Following the acquisition date, 100% of nexAir, LLC's results were consolidated in the Americas business segment. Linde's twelve months ended December 31, 2023 consolidated income statement includes sales of $408 million related to nexAir, LLC.
The company estimated the preliminary fair value of net assets acquired based on information available at the time of the acquisition and adjusted and finalized those estimates as additional information became available. Measurement period adjustments totaled approximately $27 million, and related to working capital adjustments and deferred taxes. The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in the acquisition of nexAir, LLC as of the acquisition date.
| (Millions of dollars) | January 5, 2023 | ||||
| Assets: | |||||
| Cash and cash equivalents | $ | 55 | |||
| Other current assets - net | 49 | ||||
| Property, plant and equipment, net | 241 | ||||
| Other intangible assets - net | 245 | ||||
| Other long-term liabilities - net | (1) | ||||
| Deferred taxes | (25) | ||||
| Total identifiable net assets | $ | 564 | |||
| Goodwill | $ | 485 | |||
| Fair value of previously held equity interest | $ | 183 | |||
| Total purchase price | $ | 866 |
nexAir, LLC’s assets and liabilities were measured at fair value at January 5, 2023. Fair value represents management's best estimate of assumptions about future events and uncertainties, including significant judgments related to future cash flows (sales, costs, customer attrition rates, and contributory asset charges), discount rates, competitive trends, and market comparables. Inputs used were generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.
The fair value of the previously held equity interest was based upon a purchase price valuation (excluding debt) multiplied by the company’s previously held ownership interest adjusted by a discount for lack of marketability. The fair value of property, plant & equipment, net was based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). The cost approach, adjusted for the age and condition of the property, plant and equipment, was used to estimate fair value.
Identifiable intangible assets primarily consisted of customer relationships of approximately $245 million that will be amortized over their estimated useful life of 20 years. The fair value of the customer relationships intangible asset was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from nexAir, LLC's existing customer base. There were no indefinite-lived intangible assets identified in conjunction with the acquisition.
The excess of the consideration for the acquisition over the preliminary fair value of net assets acquired was recorded as goodwill. The acquisition resulted in $485 million of goodwill, the majority of which is expected to be deductible for tax purposes. The goodwill balance is primarily attributable to the assembled workforce and operating synergies expected to result from the acquisition. The goodwill recorded as a result of the acquisition was allocated to the Americas reportable segment, which represents the reportable segment anticipated to experience operating synergies as a result of the acquisition.
Divestitures
Divestitures, net of cash divested and asset sales were $42 million, $170 million, and $70 million for the years ended December 31, 2025, 2024 and 2023, respectively. Divestiture proceeds in 2024 include $69 million in net proceeds for a divestiture in APAC and a settlement with a supplier in the Americas.
NOTE 3. COST REDUCTION PROGRAM AND OTHER CHARGES
2025 Cost reduction program and other charges
Cost reduction program and other charges were $273 million for the year ended December 31, 2025. Costs include global severance charges of $308 million, largely related to Engineering, and other benefits of $35 million largely related to a divestiture. Cost reduction program and other charges for 2025 included an income tax benefit of $81 million.
2024 Cost reduction program and other charges
Cost reduction program and other charges were $145 million for the year ended December 31, 2024. Costs include severance of $165 million, other cost reduction charges of $23 million, and a benefit of $43 million related to a divestiture in APAC. Cost reduction program and other charges for 2024 included an income tax benefit of $35 million.
2023 Cost reduction program and other charges
Cost reduction program and other charges were $40 million for the year ended December 31, 2023. Costs primarily related to severance in the Engineering segment and expenses incurred due to the intercompany reorganization for the year ended December 31, 2023. Cost reduction program and other charges for 2023 included an income tax benefit of $81 million primarily comprised of a benefit of $124 million related to the resolution of an income tax audit, partially offset by an accrual of $85 million for the potential settlement of an international income tax matter.
Cash Requirements
Cost reduction program and other charges, net of payments in the consolidated statements of cash flows for the twelve months ended December 31, 2025 and 2024 also reflect the impact of cash payments of liabilities accrued as of December 31, 2024 and 2023, respectively. Remaining cash requirements are expected to be paid largely through 2026.
The following table summarizes the activities related to the company's cost reduction programs and other charges during 2024 and 2025:
| (millions of dollars) | Severance costs | Other charges | Total | |||||||||||||||||
| Balance, December 31, 2023 | $ | 172 | $ | 42 | $ | 214 | ||||||||||||||
| 2024 Cost reduction program and other charges | 165 | (20) | 145 | |||||||||||||||||
| Less: Cash payments, net | (133) | 19 | (114) | |||||||||||||||||
| Less: Non-cash charges | — | 4 | 4 | |||||||||||||||||
| Foreign currency translation and other | (8) | — | (8) | |||||||||||||||||
| Balance, December 31, 2024 | $ | 196 | $ | 45 | $ | 241 | ||||||||||||||
| 2025 Cost reduction program and other charges | 308 | (35) | 273 | |||||||||||||||||
| Less: Cash payments, net | (136) | 2 | (134) | |||||||||||||||||
| Less: Non-cash charges | — | 40 | 40 | |||||||||||||||||
| Foreign currency translation and other | 17 | 1 | 18 | |||||||||||||||||
| Balance, December 31, 2025 | $ | 385 | $ | 53 | $ | 438 |
Classification in the consolidated financial statements
The pre-tax charges for each year are shown within operating profit in a separate line item on the consolidated statements of income. In the consolidated balance sheets, reductions in assets are recorded against the carrying value of the related assets and unpaid amounts are recorded as other current or long-term liabilities (see Note 7). On the consolidated statements of cash flows, the pre-tax impact of these charges, net of cash payments, is shown as an adjustment to reconcile net income to net cash provided by operating activities. In Note 18 Segment Information, Linde excluded these charges from its management definition of segment operating profit; a reconciliation of segment operating profit to consolidated income before income taxes and equity investments is shown within the operating profit table.
NOTE 4. LEASES
In the normal course of its business, Linde enters into various leases as the lessee, primarily involving manufacturing and distribution equipment and office space. Linde determines whether a contract is or contains a lease at contract inception. Total lease and rental expenses related to operating lease right of use assets for the twelve months ended December 31, 2025, 2024 and 2023 were $311 million, $303 million and $284 million, respectively. Operating lease costs are included in selling, general and administrative expenses and cost of sales, exclusive of depreciation and amortization. The related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively. Total lease and rental expenses related to finance lease right of use assets for the twelve months ended December 31, 2025, 2024 and 2023 were $74 million, $70 million and $58 million, respectively, and the costs are included in depreciation and amortization and interest. Related assets and obligations are included in other long-term assets and other current liabilities and other long-term liabilities, respectively**.** Linde includes renewal options that are reasonably certain to be exercised as part of the lease term. Operating and financing lease expenses above include short term and variable lease costs which are immaterial.
As most leases do not provide an implicit rate, Linde uses the applicable incremental borrowing rate at lease commencement to measure lease liabilities and right-of-use assets. Linde determines incremental borrowing rates through market sources.
The company has elected to apply the short-term lease exception for all underlying asset classes. Short-term leases are leases that, at the commencement date, have a lease term of twelve months or less and do not include a purchase option that the lessee is reasonably certain to exercise. Leases that meet the short-term lease definition are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term.
Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance. The company does not have material variable lease payments.
Gains and losses on sale and leaseback transactions were immaterial. Operating cash flows used for operating leases for the twelve months ended December 31, 2025, 2024 and 2023 were $250 million, $249 million and $249 million, respectively. Cash flows used for finance leases for the same period were immaterial.
Supplemental balance sheet information related to leases is as follows:
| (Millions of dollars) | |||||||||||
| December 31, | 2025 | 2024 | |||||||||
| Operating Leases | |||||||||||
| Operating lease right-of-use assets | $ | 886 | $ | 800 | |||||||
| Other current liabilities | 199 | 176 | |||||||||
| Other long-term liabilities | 667 | 606 | |||||||||
| Total operating lease liabilities | 866 | 782 | |||||||||
| Finance Leases | |||||||||||
| Finance lease right-of-use assets | 193 | 189 | |||||||||
| Other current liabilities | 62 | 54 | |||||||||
| Other long-term liabilities | 152 | 150 | |||||||||
| Total finance lease liabilities | $ | 214 | $ | 204 |
Supplemental operating lease information:
| (Millions of dollars) | |||||||||||
| December 31, | 2025 | 2024 | |||||||||
| Weighted average lease term (years) | 8 | 8 | |||||||||
| Weighted average discount rate | 4.46 | % | 4.17 | % |
Future operating and finance lease payments as of December 31, 2025 are as follows (millions of dollars):
| Period | Operating Leases | Financing Leases | ||||||||||||
| 2026 | $ | 232 | $ | 65 | ||||||||||
| 2027 | 183 | 55 | ||||||||||||
| 2028 | 139 | 40 | ||||||||||||
| 2029 | 103 | 25 | ||||||||||||
| 2030 | 68 | 12 | ||||||||||||
| Thereafter | 322 | 44 | ||||||||||||
| Total future undiscounted lease payments | 1,047 | 241 | ||||||||||||
| Less imputed interest | (181) | (27) | ||||||||||||
| Total reported lease liability | $ | 866 | $ | 214 |
NOTE 5. INCOME TAXES
Pre-tax income applicable to U.S. and non-U.S. operations is as follows:
| (Millions of dollars) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 2,934 | $ | 2,717 | $ | 2,859 | |||||||||||
| Non-U.S. | 5,963 | 5,852 | 5,129 | ||||||||||||||
| Total income before income taxes | $ | 8,897 | $ | 8,569 | $ | 7,988 |
Provision for Income Taxes
The following is an analysis of the provision for income taxes:
| (Millions of dollars) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Current tax expense (benefit) | |||||||||||||||||
| U.S. federal | $ | 475 | $ | 436 | $ | 260 | |||||||||||
| State and local | 114 | 106 | 116 | ||||||||||||||
| Non-U.S. | 1,865 | 1,602 | 1,522 | ||||||||||||||
| 2,454 | 2,144 | 1,898 | |||||||||||||||
| Deferred tax expense (benefit) | |||||||||||||||||
| U.S. federal | 46 | 3 | 57 | ||||||||||||||
| State and local | (15) | 11 | 5 | ||||||||||||||
| Non-U.S. | (496) | (156) | (146) | ||||||||||||||
| (465) | (142) | (84) | |||||||||||||||
| Total income taxes | $ | 1,989 | $ | 2,002 | $ | 1,814 |
Effective Tax Rate Reconciliation
Linde plc is not subject to tax in Ireland, its country of incorporation. For purposes of the effective tax rate reconciliation, the company utilizes the U.S. statutory income tax rate of 21%. An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows:
| (Dollar amounts in millions) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| U.S. Federal statutory income tax | $ | 1,868 | 21.0 | % | $ | 1,800 | 21.0 | % | $ | 1,677 | 21.0 | % | |||||||||||||||||||||||
| State and local income taxes, net of Federal income tax effect (a) | 88 | 1.0 | % | 102 | 1.2 | % | 105 | 1.3 | % | ||||||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| Germany | |||||||||||||||||||||||||||||||||||
| Changes in tax laws or rates | (158) | (1.8) | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Other | 60 | 0.7 | % | 49 | 0.6 | % | 60 | 0.8 | % | ||||||||||||||||||||||||||
| Other foreign jurisdictions | 201 | 2.2 | % | 172 | 2.0 | % | 148 | 1.9 | % | ||||||||||||||||||||||||||
| Share-based compensation | (60) | (0.7) | % | (63) | (0.7) | % | (63) | (0.8) | % | ||||||||||||||||||||||||||
| Tax credits | (42) | (0.5) | % | (45) | (0.5) | % | (20) | (0.3) | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | 10 | 0.2 | % | 2 | — | % | (54) | (0.7) | % | ||||||||||||||||||||||||||
| Other adjustments | 22 | 0.3 | % | (15) | (0.2) | % | (39) | (0.5) | % | ||||||||||||||||||||||||||
| Provision for income taxes | $ | 1,989 | 22.4 | % | $ | 2,002 | 23.4 | % | $ | 1,814 | 22.7 | % | |||||||||||||||||||||||
| (a) In 2025, 2024, and 2023, state taxes in California, Illinois, Indiana, New Jersey, Michigan, Pennsylvania, Texas, Florida, Minnesota, and Oregon made up the majority (greater than 50 percent) of the tax effect in this category. |
Income Taxes Paid
Income taxes paid by federal, state/local, and foreign:
| (Millions of dollars) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| U.S. Federal | $ | 544 | $ | 503 | $ | 483 | |||||||||||
| State and local | 100 | 106 | 121 | ||||||||||||||
| Non-U.S. | 1,630 | 1,607 | 1,351 | ||||||||||||||
| Total | $ | 2,274 | $ | 2,216 | $ | 1,955 |
Income taxes paid by jurisdiction:
| (Millions of dollars) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 644 | $ | 609 | $ | 604 | |||||||||||
| Germany | 82 | 224 | 236 | ||||||||||||||
| China | 199 | 201 | 187 | ||||||||||||||
| Mexico | 237 | 158 | 138 | ||||||||||||||
| Others | 1,112 | 1,024 | 790 | ||||||||||||||
| Total | $ | 2,274 | $ | 2,216 | $ | 1,955 |
Net Deferred Tax Liabilities
Net deferred tax liabilities included in the consolidated balance sheets are comprised of the following:
| (Millions of dollars) December 31, | 2025 | 2024 | |||||||||
| Deferred tax liabilities | |||||||||||
| Fixed assets | $ | 2,462 | $ | 2,378 | |||||||
| Goodwill | 263 | 233 | |||||||||
| Other intangible assets | 2,672 | 2,638 | |||||||||
| Subsidiary/equity investments | 492 | 535 | |||||||||
| Benefit plans and related (b)(c) | 40 | — | |||||||||
| Other (a) | 488 | 736 | |||||||||
| $ | 6,417 | $ | 6,520 | ||||||||
| Deferred tax assets | |||||||||||
| Carryforwards | $ | 380 | $ | 505 | |||||||
| Benefit plans and related (b)(c) | — | 16 | |||||||||
| Inventory | 87 | 87 | |||||||||
| Accruals and other (d) | 968 | 827 | |||||||||
| $ | 1,435 | $ | 1,435 | ||||||||
| Less: Valuation allowances (e) | (151) | (146) | |||||||||
| $ | 1,284 | $ | 1,289 | ||||||||
| Net deferred tax liabilities | $ | 5,133 | $ | 5,231 | |||||||
| Recorded in the consolidated balance sheets as (Note 7): | |||||||||||
| Other long-term assets | 423 | 428 | |||||||||
| Deferred credits | 5,556 | 5,659 | |||||||||
| $ | 5,133 | $ | 5,231 |
(a)Includes $236 million in 2025 and $235 million in 2024 related to right-of-use lease assets and includes $82 million in 2025 and $335 million in 2024 related to timing differences regarding certain engineering projects accounted for on the cost incurred input method.
(b)Includes deferred tax liabilities of $102 million and $95 million in 2025 and 2024, respectively, related to pension / OPEB funded status (see Notes 7 and 16).
(c)The amounts are net of deferred tax assets of $137 million in 2025 and deferred tax liabilities of $290 million in 2024.
(d)Includes $244 million in 2025 and $244 million in 2024 related to lease liabilities.
(e)Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars):
| (Millions of dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance, January 1, | $ | (146) | $ | (176) | $ | (276) | |||||||||||
| Income tax (charge) benefit | 1 | 26 | 65 | ||||||||||||||
| Other, including write-offs | — | — | 34 | ||||||||||||||
| Translation adjustments | (6) | 4 | 1 | ||||||||||||||
| Balance, December 31, | $ | (151) | $ | (146) | $ | (176) |
The company evaluates deferred tax assets quarterly to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances.
As of December 31, 2025, the company had $380 million of deferred tax assets relating to net operating losses (“NOLs”) and tax credits and $151 million of valuation allowances. These deferred tax assets include $338 million relating to NOLs, of which $46 million expire within 5 years, $20 million expire after 5 years, and $272 million have no expiration. The deferred tax assets also include $42 million related to credits of which $2 million expire within 5 years, $36 million expire after 5 years, and $4 million have no expiration. The valuation allowances of $151 million primarily relate to NOLs. Management has determined, based on financial projections and available tax strategies, that it is unlikely that the benefit of these losses will be realized. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge.
The company has $492 million of non-U.S income and withholding taxes accrued related to its investment in non-U.S. subsidiaries and equity investments. A provision has not been made for any additional non-U.S. income or withholding taxes at December 31, 2025 on unremitted non-U.S. earnings on which the company intends to remain indefinitely reinvested or on other outside basis differences in its investments unrelated to unremitted earnings. A determination of deferred taxes related to these items is not practicable.
Uncertain Tax Positions
Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $315 million, $292 million and $304 million as of December 31, 2025, 2024, and 2023, respectively. If recognized, the majority of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statements of income.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| (Millions of dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Unrecognized income tax benefits, January 1 | $ | 292 | $ | 304 | $ | 325 | |||||||||||
| Additions for tax positions of prior years | 9 | 19 | 108 | ||||||||||||||
| Reductions for tax positions of prior years (a) | (2) | (9) | (121) | ||||||||||||||
| Additions for current year tax positions | 22 | 11 | — | ||||||||||||||
| Reductions for settlements with taxing authorities | (4) | (12) | (1) | ||||||||||||||
| Other (b) | (2) | (21) | (7) | ||||||||||||||
| Unrecognized income tax benefits, December 31 | $ | 315 | $ | 292 | $ | 304 |
(a)2023 amounts are primarily related to the closure of tax audits.
(b)Other includes reductions for statute of limitation lapses and foreign currency translation.
The company classifies interest income and expense related to income taxes as tax expense in the consolidated statements of income. For the years ended December 31, 2025 and 2024, the company recognized net interest expense of $3 million. For the year ended December 31, 2023, the company recognized net interest income of $17 million. The company had $19 million and $16 million of accrued interest and penalties as of December 31, 2025 and 2024, respectively, which were recorded in other long-term liabilities in the consolidated balance sheets (See Note 7).
As of December 31, 2025, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:
| Major tax jurisdictions | Open Years | ||||
| Americas | |||||
| United States | 2022 through 2025 | ||||
| Canada | 2014 through 2025 | ||||
| Mexico | 2014 through 2025 | ||||
| Brazil | 2008 through 2025 | ||||
| EMEA | |||||
| Germany | 2018 through 2025 | ||||
| United Kingdom | 2022 through 2025 | ||||
| APAC | |||||
| Australia | 2021 through 2025 | ||||
| China | 2020 through 2025 | ||||
| India | 2007 through 2025 | ||||
| South Korea | 2020 through 2025 |
NOTE 6. EARNINGS PER SHARE – LINDE PLC SHAREHOLDERS
Basic and Diluted earnings per share - Linde plc shareholders is computed by dividing Net income – Linde plc for the period by the weighted average number of either basic or diluted shares outstanding, as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Numerator (Millions of dollars) | |||||||||||||||||
| Net Income – Linde plc | $ | 6,898 | $ | 6,565 | $ | 6,199 | |||||||||||
| Denominator (Thousands of shares) | |||||||||||||||||
| Weighted average shares outstanding | 468,673 | 477,998 | 487,656 | ||||||||||||||
| Shares earned and issuable under compensation plans | 815 | 775 | 535 | ||||||||||||||
| Weighted average shares used in basic earnings per share | 469,488 | 478,773 | 488,191 | ||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Stock options and awards | 2,707 | 3,319 | 4,099 | ||||||||||||||
| Weighted average shares used in diluted earnings per share | 472,195 | 482,092 | 492,290 | ||||||||||||||
| Basic Earnings Per Share | $ | 14.69 | $ | 13.71 | $ | 12.70 | |||||||||||
| Diluted Earnings Per Share | $ | 14.61 | $ | 13.62 | $ | 12.59 |
The weighted-average of antidilutive securities excluded from the calculation of diluted earnings per share were 572 thousand and 268 thousand for the twelve months ended December 31, 2025 and 2024, respectively. There were no antidilutive securities in the respective 2023 period.
NOTE 7. SUPPLEMENTAL INFORMATION
Income Statement
| (Millions of dollars) Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Selling, General and Administrative | |||||||||||||||||
| Selling | $ | 1,350 | $ | 1,333 | $ | 1,330 | |||||||||||
| General and administrative | 2,083 | 2,004 | 1,965 | ||||||||||||||
| $ | 3,433 | $ | 3,337 | $ | 3,295 |
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Depreciation and Amortization (a) | |||||||||||||||||
| Depreciation | $ | 3,246 | $ | 3,226 | $ | 3,266 | |||||||||||
| Amortization of intangibles (Note 10) | 517 | 554 | 550 | ||||||||||||||
| Depreciation and Amortization | $ | 3,763 | $ | 3,780 | $ | 3,816 |
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Other Income (Expenses) – Net | |||||||||||||||||
| Currency related net gains (losses) | $ | (13) | $ | (11) | $ | (47) | |||||||||||
| Partnership income | 2 | 3 | 2 | ||||||||||||||
| Severance expense | (16) | (16) | (12) | ||||||||||||||
| Asset divestiture gains (losses) – net | 34 | 77 | 21 | ||||||||||||||
| Insurance recoveries | 2 | 45 | 10 | ||||||||||||||
| Purchase accounting impacts - Linde AG merger | (164) | (17) | (15) | ||||||||||||||
| Other – net gains (losses) | 97 | 104 | — | ||||||||||||||
| $ | (58) | $ | 185 | $ | (41) |
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Interest Expense – Net | |||||||||||||||||
| Interest incurred on debt and other | $ | 575 | $ | 555 | $ | 480 | |||||||||||
| Interest income | (209) | (228) | (197) | ||||||||||||||
| Amortization on acquired debt | — | (3) | (16) | ||||||||||||||
| Interest capitalized | (111) | (68) | (67) | ||||||||||||||
| $ | 255 | $ | 256 | $ | 200 |
Balance Sheet
| (Millions of dollars) December 31, | 2025 | 2024 | |||||||||
| Accounts Receivable | |||||||||||
| Trade and Other receivables | $ | 5,547 | $ | 5,043 | |||||||
| Less: allowance for expected credit losses | (581) | (421) | |||||||||
| $ | 4,966 | $ | 4,622 |
Receivables
Linde applies loss rates that are lifetime expected credit losses at initial recognition of the receivables. These expected loss rates are based on an analysis of the actual historical default rates for each business, taking regional circumstances into account. If necessary, these historical default rates are adjusted to reflect the impact of current changes in the macroeconomic environment using forward-looking information. The loss rates are also evaluated based on the expectations of the responsible management team regarding the collectability of the receivables. Gross trade receivables
aged less than one year were $5,032 million and $4,573 million at December 31, 2025 and December 31, 2024, respectively, and gross receivables aged greater than one year were $377 million and $322 million at December 31, 2025 and December 31, 2024, respectively. Gross other receivables were $138 million and $148 million at December 31, 2025 and December 31, 2024, respectively. Receivables aged greater than one year are generally fully reserved unless specific circumstances warrant exceptions, such as those backed by federal governments.
Provisions for expected credit losses were $207 million, $180 million and $175 million for the twelve months ended December 31, 2025, 2024 and 2023, respectively. Allowance for expected credit losses increased to $581 million including an adjustment of $150 million to the allowance for homecare receivables, recorded through Other income (expenses) - net. The allowance activity in the twelve months ended December 31, 2025 related to write-offs of uncollectible amounts, net of recoveries and currency movements is not material.
| December 31, | 2025 | 2024 | |||||||||
| Inventories | |||||||||||
| Raw materials and supplies | $ | 530 | $ | 529 | |||||||
| Work in process | 346 | 371 | |||||||||
| Finished goods | 1,179 | 1,046 | |||||||||
| $ | 2,055 | $ | 1,946 |
| December 31, | 2025 | 2024 | |||||||||
| Prepaid and Other Current Assets | |||||||||||
| Prepaid and other deferred charges (b) | $ | 546 | $ | 579 | |||||||
| VAT recoverable | 229 | 177 | |||||||||
| Unrealized gains on derivatives (Note 12) | 107 | 302 | |||||||||
| Other (c) | 97 | 206 | |||||||||
| $ | 979 | $ | 1,264 |
| December 31, | 2025 | 2024 | |||||||||
| Other Long-term Assets | |||||||||||
| Pension assets (Note 16) | $ | 1,298 | $ | 1,106 | |||||||
| Insurance contracts (d) | 32 | 32 | |||||||||
| Long-term receivables, net (e) | 29 | 28 | |||||||||
| Lease assets (Note 4) | 1,079 | 989 | |||||||||
| Deposits | 62 | 73 | |||||||||
| Investments carried at cost (f) (Note 17) | 108 | 106 | |||||||||
| Deferred charges | 63 | 58 | |||||||||
| Deferred income taxes (Note 5) | 423 | 428 | |||||||||
| Unrealized gains on derivatives (Note 12) | 10 | 4 | |||||||||
| Contract assets (Note 19) | 67 | — | |||||||||
| Other | 248 | 206 | |||||||||
| $ | 3,419 | $ | 3,030 |
| December 31, | 2025 | 2024 | |||||||||
| Other Current Liabilities | |||||||||||
| Accrued expenses | $ | 1,278 | $ | 1,321 | |||||||
| Payroll | 649 | 618 | |||||||||
| VAT payable | 342 | 256 | |||||||||
| Pension and postretirement (Note 16) | 41 | 37 | |||||||||
| Interest payable | 310 | 227 | |||||||||
| Lease liability (Note 4) | 261 | 230 | |||||||||
| Insurance reserves | 21 | 20 | |||||||||
| Unrealized losses on derivatives (Note 12) | 72 | 92 | |||||||||
| Contingent liabilities (Note 17) | 128 | 167 | |||||||||
| Cost reduction programs and other charges (Note 3) | 255 | 175 | |||||||||
| Other | 814 | 783 | |||||||||
| $ | 4,171 | $ | 3,926 |
Payables
Linde has agreements to provide supplier finance programs which facilitate participating suppliers' ability to finance payment obligations of the company with designated third-party financial institutions. The outstanding payment obligations under the company’s supplier finance programs are included in the consolidated balance sheets and were not material as of December 31, 2025 or 2024.
| December 31, | 2025 | 2024 | |||||||||
| Other Long-term Liabilities | |||||||||||
| Pension and postretirement (Note 16) | $ | 473 | $ | 519 | |||||||
| Tax liabilities for uncertain tax positions (Note 5) | 230 | 210 | |||||||||
| Lease liability (Note 4) | 819 | 756 | |||||||||
| Interest and penalties for uncertain tax positions (Note 5) | 19 | 16 | |||||||||
| Insurance reserves | 63 | 60 | |||||||||
| Asset retirement obligation | 318 | 305 | |||||||||
| Unrealized losses on derivatives (Note 12) | 2 | 9 | |||||||||
| Cost reduction programs and other charges (Note 3) | 183 | 66 | |||||||||
| Contingent liabilities (Note 17) | 1,828 | 1,646 | |||||||||
| Other | 420 | 428 | |||||||||
| $ | 4,355 | $ | 4,015 |
| December 31, | 2025 | 2024 | |||||||||
| Deferred Credits | |||||||||||
| Deferred income taxes (Note 5) | $ | 5,556 | $ | 5,659 | |||||||
| Contract liabilities (Note 19) | 1,284 | 1,098 | |||||||||
| $ | 6,840 | $ | 6,757 |
| December 31, | 2025 | 2024 | |||||||||
| Accumulated Other Comprehensive Income (Loss) | |||||||||||
| Cumulative translation adjustment - net of taxes: | |||||||||||
| Americas (g) | $ | (3,892) | $ | (4,422) | |||||||
| EMEA (g) | (958) | (1,235) | |||||||||
| APAC (g) | (1,170) | (1,736) | |||||||||
| Engineering | 283 | (432) | |||||||||
| Other | (616) | 858 | |||||||||
| (6,353) | (6,967) | ||||||||||
| Derivatives – net of taxes | 16 | (6) | |||||||||
| Pension/OPEB funded status obligation (net of $102 million tax obligation in 2025 and $95 million tax obligation in 2024) (Note 16) | 104 | 79 | |||||||||
| $ | (6,233) | $ | (6,894) |
(a)Depreciation and amortization expense in 2025 include $346 million and $431 million, respectively, of Linde AG purchase accounting impacts. In 2024, depreciation and amortization expense include $467 million and $456 million, respectively, of Linde AG purchase accounting impacts.
(b) Includes estimated income tax payments of $106 million in 2025 and $221 million in 2024.
(c) In 2024, the balance relates primarily to current notes receivable from the sale of GIST, which were collected in 2025.
(d) Consists primarily of insurance contracts and other investments to be utilized for non-qualified pension and OPEB obligations.
(e) The balances at December 31, 2025 and 2024 are net of reserves of $41 million and $36 million, respectively.
(f) Includes investments from the deconsolidation of Russian subsidiaries.
(g) Americas consists of currency translation adjustments primarily in Canada, Mexico, Brazil, and Argentina. EMEA relates primarily to Germany, the U.K., the Netherlands, Norway and Switzerland. APAC relates primarily to South Korea, India, and Australia.
NOTE 8. PROPERTY, PLANT AND EQUIPMENT – NET
Significant classes of property, plant and equipment are as follows:
| (Millions of dollars) December 31, | Depreciable Lives (Yrs) | 2025 | 2024 | |||||||||||||||||
| Production plants (primarily 15-year life) (a) | 10-20 | $ | 40,301 | $ | 35,364 | |||||||||||||||
| Storage tanks | 15-20 | 6,215 | 5,689 | |||||||||||||||||
| Transportation equipment and other | 3-15 | 4,872 | 4,210 | |||||||||||||||||
| Cylinders | 10-30 | 5,542 | 4,970 | |||||||||||||||||
| Buildings | 25-40 | 3,831 | 3,355 | |||||||||||||||||
| Land and improvements (b) | 0-20 | 1,188 | 1,045 | |||||||||||||||||
| Construction in progress | 6,130 | 4,086 | ||||||||||||||||||
| 68,079 | 58,719 | |||||||||||||||||||
| Less: accumulated depreciation | (39,819) | (33,944) | ||||||||||||||||||
| $ | 28,260 | $ | 24,775 |
(a) Depreciable lives of production plants related to long-term customer supply contracts are generally consistent with the contract lives.
(b) Land is not depreciated.
NOTE 9. GOODWILL
Changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 were as follows:
| (Millions of dollars) | Americas | EMEA | APAC | Engineering | Other | Total | |||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 9,703 | $ | 9,834 | $ | 4,499 | $ | 2,422 | $ | 293 | $ | 26,751 | |||||||||||||||||||||||
| Acquisitions (Note 2) | 191 | — | 17 | — | — | 208 | |||||||||||||||||||||||||||||
| Foreign currency translation and other | (56) | (538) | (253) | (150) | (21) | (1,018) | |||||||||||||||||||||||||||||
| Disposals (Note 2) | — | — | (4) | — | — | (4) | |||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 9,838 | 9,296 | 4,259 | 2,272 | 272 | 25,937 | |||||||||||||||||||||||||||||
| Acquisitions (Note 2) | 31 | 120 | 99 | — | 2 | 252 | |||||||||||||||||||||||||||||
| Foreign currency translation and other | 41 | 1,137 | 243 | 306 | 11 | 1,738 | |||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | 9,910 | $ | 10,553 | $ | 4,601 | $ | 2,578 | $ | 285 | $ | 27,927 |
Linde performs its goodwill impairment tests annually as of October 1 or more frequently if events or circumstances indicate that an impairment loss may have been incurred. For the fourth quarter 2025 test, the company applied the FASB's accounting guidance, which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test goodwill for impairment. Based on the qualitative assessments performed, the company concluded that it was more likely than not that the fair value of each reporting unit substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. There were no indicators of impairment since the annual goodwill impairment test was performed through December 31, 2025.
NOTE 10. OTHER INTANGIBLE ASSETS
The following is a summary of Linde’s other intangible assets at December 31, 2025 and 2024:
| (Millions of dollars) For the year ended December 31, 2025 | Customer Relationships | Brands/Tradenames | Other Intangible Assets | Total | |||||||||||||||||||
| Cost: | |||||||||||||||||||||||
| Balance, December 31, 2024 | $ | 10,972 | $ | 2,504 | $ | 1,934 | $ | 15,410 | |||||||||||||||
| Additions | 78 | — | 35 | 113 | |||||||||||||||||||
| Foreign currency translation | 913 | 191 | 168 | 1,272 | |||||||||||||||||||
| Disposals | (1) | — | (10) | (11) | |||||||||||||||||||
| Other * | (5) | (5) | 78 | 68 | |||||||||||||||||||
| Balance, December 31, 2025 | 11,957 | 2,690 | 2,205 | 16,852 | |||||||||||||||||||
| Less: accumulated amortization: | |||||||||||||||||||||||
| Balance, December 31, 2024 | (2,571) | (265) | (1,244) | (4,080) | |||||||||||||||||||
| Amortization expense (Note 7) | (394) | (25) | (98) | (517) | |||||||||||||||||||
| Foreign currency translation | (224) | (8) | (102) | (334) | |||||||||||||||||||
| Disposals | — | — | 10 | 10 | |||||||||||||||||||
| Other * | 5 | 5 | (70) | (60) | |||||||||||||||||||
| Balance, December 31, 2025 | (3,184) | (293) | (1,504) | (4,981) | |||||||||||||||||||
| Net Balance, December 31, 2025 | $ | 8,773 | $ | 2,397 | $ | 701 | $ | 11,871 |
| (Millions of dollars) For the year ended December 31, 2024 | Customer Relationships | Brands/Tradenames | Other Intangible Assets | Total | |||||||||||||||||||
| Cost: | |||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 11,479 | $ | 2,609 | $ | 1,913 | $ | 16,001 | |||||||||||||||
| Additions | 22 | — | 28 | 50 | |||||||||||||||||||
| Foreign currency translation | (530) | (107) | (113) | (750) | |||||||||||||||||||
| Disposals | (10) | (2) | (48) | (60) | |||||||||||||||||||
| Other * | 11 | 4 | 154 | 169 | |||||||||||||||||||
| Balance, December 31, 2024 | 10,972 | 2,504 | 1,934 | 15,410 | |||||||||||||||||||
| Less: accumulated amortization: | |||||||||||||||||||||||
| Balance, December 31, 2023 | (2,270) | (233) | (1,099) | (3,602) | |||||||||||||||||||
| Amortization expense (Note 7) | (416) | (36) | (102) | (554) | |||||||||||||||||||
| Foreign currency translation | 116 | 5 | 66 | 187 | |||||||||||||||||||
| Disposals | 2 | — | 42 | 44 | |||||||||||||||||||
| Other * | (3) | (1) | (151) | (155) | |||||||||||||||||||
| Balance, December 31, 2024 | (2,571) | (265) | (1,244) | (4,080) | |||||||||||||||||||
| Net balance at December 31, 2024 | $ | 8,401 | $ | 2,239 | $ | 690 | $ | 11,330 |
*Other primarily relates to the write-off of fully amortized assets and reclassifications.
There are no expected residual values related to these intangible assets. Amortization expense for the years ended December 31, 2025, 2024 and 2023 was $517 million, $554 million and $550 million, respectively. The remaining weighted-average amortization period for intangible assets is approximately 21 years.
Total estimated annual amortization expense related to finite-lived intangibles is as follows:
| (Millions of dollars) | |||||
| 2026 | $ | 615 | |||
| 2027 | 598 | ||||
| 2028 | 580 | ||||
| 2029 | 575 | ||||
| 2030 | 574 | ||||
| Thereafter | 7,103 | ||||
| Total amortization related to finite-lived intangible assets | 10,045 | ||||
| Indefinite-lived intangible assets at December 31, 2025 | 1,826 | ||||
| Net intangible assets at December 31, 2025 | $ | 11,871 |
NOTE 11. DEBT
The following is a summary of Linde’s outstanding debt at December 31, 2025 and 2024:
| (Millions of dollars) | |||||||||||
| December 31, | 2025 | 2024 | |||||||||
| SHORT-TERM | |||||||||||
| Commercial paper | $ | 4,226 | $ | 3,964 | |||||||
| Other bank borrowings (primarily non U.S.) | 284 | 259 | |||||||||
| Total short-term debt | 4,510 | 4,223 | |||||||||
| LONG-TERM (a) | |||||||||||
| (U.S. dollar denominated unless otherwise noted) | |||||||||||
| 4.700% Notes due 2025 (d) | — | 599 | |||||||||
| 2.65% Notes due 2025 (d) | — | 400 | |||||||||
| 3.625% Euro denominated notes due 2025 (f) | — | 517 | |||||||||
| 1.625% Euro denominated notes due 2025 (h) | — | 517 | |||||||||
| 0.00% Euro denominated notes due 2026 | 822 | 726 | |||||||||
| 3.20% Notes due 2026 | 725 | 725 | |||||||||
| 3.434% Notes due 2026 | 200 | 199 | |||||||||
| 1.652% Euro denominated notes due 2027 | 95 | 84 | |||||||||
| 0.250% Euro denominated notes due 2027 | 880 | 776 | |||||||||
| 1.00% Euro denominated notes due 2027 | 589 | 519 | |||||||||
| 2.271% Euro denominated notes due 2027 (g) | 705 | — | |||||||||
| 1.00% Euro denominated notes due 2028 (b) | 854 | 742 | |||||||||
| 3.00% Euro denominated notes due 2028 | 820 | 722 | |||||||||
| 3.375% Euro denominated notes due 2029 | 878 | 773 | |||||||||
| 2.625% Euro denominated notes due 2029 (c) | 994 | — | |||||||||
| 0.6150% Swiss franc denominated notes due 2029 (e) | 283 | — | |||||||||
| 1.10% Notes due 2030 | 698 | 697 | |||||||||
| 1.90% Euro denominated notes due 2030 | 120 | 106 | |||||||||
| 3.375% Euro denominated notes due 2030 | 877 | 772 | |||||||||
| 1.375% Euro denominated notes due 2031 | 884 | 779 | |||||||||
| 3.20% Euro denominated notes due 2031 | 997 | 878 | |||||||||
| 0.550% Euro denominated notes due 2032 | 877 | 772 | |||||||||
| 3.125% Euro denominated notes due 2032 (g) | 759 | — | |||||||||
| 0.375% Euro denominated notes due 2033 | 582 | 512 | |||||||||
| 3.00% Euro denominated notes due 2033 (c) | 877 | — | |||||||||
| 1.0629% Swiss franc denominated notes due 2033 (e) | 346 | — | |||||||||
| 3.625% Euro denominated notes due 2034 | 760 | 670 | |||||||||
| 3.50% Euro denominated notes due 2034 | 874 | 769 | |||||||||
| 1.625% Euro denominated notes due 2035 | 934 | 822 | |||||||||
| 3.40% Euro denominated notes due 2036 | 816 | 718 | |||||||||
| 3.250% Euro denominated notes due 2037 (c) | 756 | — | |||||||||
| 3.750% Euro denominated notes due 2038 (g) | 582 | — | |||||||||
| 3.55% Notes due 2042 | 666 | 666 | |||||||||
| 3.75% Euro denominated notes due 2044 | 810 | 712 | |||||||||
| 2.00% Notes due 2050 | 297 | 297 | |||||||||
| 1.00% Euro denominated notes due 2051 | 805 | 707 | |||||||||
| Non U.S. borrowings | 307 | 214 |
| Other | 10 | 10 | |||||||||
| 22,479 | 17,400 | ||||||||||
| Less: current portion of long-term debt | (1,796) | (2,057) | |||||||||
| Total long-term debt | 20,683 | 15,343 | |||||||||
| Total debt | $ | 26,989 | $ | 21,623 |
(a)Amounts are net of unamortized discounts, premiums and/or debt issuance costs as applicable.
(b)December 31, 2025 and December 31, 2024 included a cumulative $25 million and $32 million adjustment to carrying value, respectively, related to hedge accounting of interest rate swaps, including related terminations. Refer to Note 12.
(c)In February 2025, Linde issued €850 million of 2.625% notes due in 2029, €750 million of 3.00% notes due in 2033, and €650 million of 3.25% notes due in 2037.
(d)In February 2025, Linde redeemed $600 million of 4.700% notes that were due in 2025 and repaid $400 million of 2.65% notes that became due.
(e)In June 2025, Linde issued CHF225 million of 0.6150% notes due in 2029 and CHF275 million of 1.0629% notes due in 2033.
(f)In June 2025, Linde repaid €500 million of 3.625% notes that became due.
(g)In November 2025, Linde issued three tranches of euro-denominated notes, €600 million of floating-rate notes due in 2027, at three-month EURIBOR plus a fixed spread and resetting quarterly (2.271% as of December 31, 2025); €650 million of 3.125% fixed-rate notes due in 2032, and €500 million of 3.750% fixed-rate notes due in 2038.
(h)In December 2025, Linde repaid €500 million of notes that became due.
Credit Facilities
On December 7, 2022, the company and certain of its subsidiaries entered into an amended and restated unsecured revolving credit agreement (the “Five Year Credit Agreement”) with a syndicate of banking institutions. The Five Year Credit Agreement provides for total commitments of $5.0 billion, which may be increased up to $6.5 billion, subject to receipt of additional commitments and satisfaction of customary conditions. There are no financial maintenance covenants contained within the credit agreement. The revolving credit facility expires on December 7, 2027 with the option to request two one-year extensions of the expiration date.
In addition, on December 3, 2025, the company and certain of its subsidiaries entered into an unsecured 364-day revolving credit agreement (the “364-Day Credit Agreement” and, together with the Five Year Credit Agreement, the “Credit Agreements”) with a syndicate of banking institutions. The 364-Day Credit Agreement provides for total commitments of $1.5 billion. There are no financial maintenance covenants contained within the credit agreement. The 364-Day Credit Agreement expires on December 2, 2026 with the option to elect to have the entire principal balances outstanding under the Credit Agreement converted into non-revolving term loans, which will be due and payable one year after the commitment termination date.
No borrowings were outstanding under the Credit Agreements as of December 31, 2025.
Other Debt Information
The weighted-average interest rates of short-term borrowings outstanding were 3.0% and 3.8% as of December 31, 2025 and 2024, respectively.
Expected maturities of long-term debt are as follows:
| (Millions of dollars) | ||||||||
| 2026 | $ | 1,796 | ||||||
| 2027 | 2,311 | |||||||
| 2028 | 1,730 | |||||||
| 2029 | 2,168 | |||||||
| 2030 | 1,708 | |||||||
| Thereafter | 12,766 | |||||||
| $ | 22,479 |
As of December 31, 2025, the amount of Linde's assets pledged as collateral was immaterial.
See Note 13 for the fair value information related to debt.
NOTE 12. FINANCIAL INSTRUMENTS
In its normal operations, Linde is exposed to market risks relating to fluctuations in interest rates, foreign currency exchange rates, energy and commodity costs. The objective of financial risk management at Linde is to minimize the negative impact of such fluctuations on the company’s earnings and cash flows. To manage these risks, among other strategies, Linde routinely enters into various derivative financial instruments (“derivatives”) including interest-rate swap and treasury rate lock agreements, forward contracts, and commodity-swap agreements. These instruments are not entered into for trading purposes and Linde only uses commonly traded and non-leveraged instruments.
There are three types of derivatives that the company enters into: (i) those relating to fair-value exposures, (ii) those relating to cash-flow exposures, and (iii) those relating to foreign currency net investment exposures. Fair-value exposures relate to recognized assets or liabilities, and firm commitments; cash-flow exposures relate to the variability of future cash flows associated with recognized assets or liabilities, or forecasted transactions; and net investment exposures relate to the impact of foreign currency exchange rate changes on the carrying value of net assets denominated in foreign currencies.
When a derivative is executed and hedge accounting is appropriate, it is designated as either a fair-value hedge, cash-flow hedge, or a net investment hedge. Currently, Linde designates all interest-rate and treasury-rate locks as hedges for accounting purposes when used. Currency contracts are generally not designated as hedges for accounting purposes. However, currency contracts related to certain forecasted transactions and net investments in foreign-denominated subsidiaries are designated as hedges for accounting purposes. Whether designated as hedges for accounting purposes or not, all derivatives are linked to an appropriate underlying exposure. On an ongoing basis, the company assesses the hedge effectiveness of all derivatives designated as hedges for accounting purposes to determine if they continue to be highly effective in offsetting changes in fair values or cash flows of the underlying hedged items. If it is determined that the hedge is not highly effective, through the use of a qualitative assessment, then hedge accounting will be discontinued prospectively.
Counterparties to Linde’s derivatives are major banking institutions with credit ratings of investment grade or better. The company has Credit Support Annexes ("CSAs") in place for certain entities with their principal counterparties to minimize potential default risk and to mitigate counterparty risk. Under the CSAs, the fair values of derivatives for the purpose of interest rate and currency management are collateralized with cash on a regular basis. As of December 31, 2025, the impact of such collateral posting arrangements on the fair value of derivatives was insignificant. Management believes the risk of incurring losses on derivative contracts related to credit risk is remote and any losses would be immaterial.
The following table is a summary of the notional amount and fair value of derivatives outstanding at December 31, 2025 and 2024 for consolidated subsidiaries:
| Fair Value | |||||||||||||||||||||||||||||||||||
| (Millions of dollars) | Notional Amounts | Assets (a) | Liabilities (a) | ||||||||||||||||||||||||||||||||
| December 31, | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||
| Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||
| Currency contracts: | |||||||||||||||||||||||||||||||||||
| Balance sheet items | $ | 9,509 | $ | 9,935 | $ | 79 | $ | 256 | $ | 34 | $ | 64 | |||||||||||||||||||||||
| Forecasted transactions | 164 | 168 | 3 | 2 | 1 | 6 | |||||||||||||||||||||||||||||
| Total | $ | 9,673 | $ | 10,103 | $ | 82 | $ | 258 | $ | 35 | $ | 70 | |||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||
| Currency contracts: | |||||||||||||||||||||||||||||||||||
| Forecasted transactions | $ | 560 | $ | 780 | $ | 24 | $ | 7 | $ | 1 | $ | 11 | |||||||||||||||||||||||
| Forward exchange contracts | 3,420 | 1,059 | 6 | 30 | 28 | — | |||||||||||||||||||||||||||||
| Commodity contracts | N/A | N/A | 5 | 11 | 10 | 20 | |||||||||||||||||||||||||||||
| Total Hedges | $ | 3,980 | $ | 1,839 | $ | 35 | $ | 48 | $ | 39 | $ | 31 | |||||||||||||||||||||||
| Total Derivatives | $ | 13,653 | $ | 11,942 | $ | 117 | $ | 306 | $ | 74 | $ | 101 |
(a) Amounts at December 31, 2025 and 2024, respectively, included current assets of $107 million and $302 million, which are recorded in prepaid and other current assets; long-term assets of $10 million and $4 million, which are recorded in other long-term assets; current liabilities of $72 million and $92 million, which are recorded in other current liabilities; and long-term liabilities of $2 million and $9 million, which are recorded in other long-term liabilities.
In addition, during 2024, Linde issued credit default swaps (“CDS”) to third-party financial institutions. The CDS relate to secured borrowings provided by the financial institutions to a government customer in Mexico, that were utilized to pay certain of Linde’s outstanding receivables. The notional amount of the CDS, which was $73 million and $102 million for the two programs as of December 31, 2025, will reduce on a monthly basis over their respective 24-month and 22-month terms. As of December 31, 2025, the fair value of the associated derivative asset and liability positions were not material.
Balance Sheet Items
Foreign currency contracts related to balance sheet items consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on recorded balance sheet assets and liabilities denominated in currencies other than the functional currency of the related operating unit. Certain forward currency contracts are entered into to protect underlying monetary assets and liabilities denominated in foreign currencies from foreign exchange risk and are not designated as hedging instruments. For balance sheet items that are not designated as hedging instruments, the fair value adjustments on these contracts are offset by the fair value adjustments recorded on the underlying monetary assets and liabilities.
Forecasted Transactions
Foreign currency contracts related to forecasted transactions consist of forward contracts entered into to manage the exposure to fluctuations in foreign-currency exchange rates on (1) forecasted purchases of capital-related equipment and services, (2) forecasted sales, or (3) other forecasted cash flows denominated in currencies other than the functional currency of the related operating units. For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income (loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase. For forecasted transactions that do not qualify for cash flow hedging relationships, fair value adjustments are recorded directly to earnings. Linde is hedging forecasted transactions for a maximum period of four years.
Commodity Contracts
Commodity contracts are entered into to manage the exposure to fluctuations in commodity prices, which arise in the normal course of business from its procurement transactions. To reduce the extent of this risk, Linde enters into a limited number of electricity, natural gas, and propane gas derivatives. For forecasted transactions that are designated as cash flow hedges, fair value adjustments are recorded to accumulated other comprehensive income (loss) with deferred amounts reclassified to earnings over the same time period as the income statement impact of the associated purchase. Linde is hedging commodity contracts for a maximum period of three years.
Net Investment Hedges
Foreign Currency-Denominated Debt Designations
As of December 31, 2025, Linde has €17.3 billion ($20.4 billion) Euro-denominated notes and intercompany loans, ¥5.2 billion ($0.7 billion) CNY-denominated intercompany loans and CHF500 million ($631 million) CHF-denominated notes that are designated as hedges of the net investment positions in certain foreign operations. Since hedge inception, the deferred loss recorded within the cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $1,558 million (deferred loss of $2,704 million in the consolidated statement of comprehensive income for the year ended December 31, 2025), which is largely offset by an offsetting loss or gain on the underlying foreign net investment being hedged.
Foreign Currency Forward Exchange Contract Designations
The Company enters into forward exchange contracts to partially hedge its net investment in certain foreign-denominated subsidiaries. The Company assesses the forward exchange contracts used as net investment hedges under the spot method. This results in the difference between the spot rate and the forward rate of the forward exchange contract being excluded from the assessment of hedge effectiveness and recorded as incurred as a reduction in interest expense - net in the consolidated statements of income. Since hedge inception and for the year ended December 31, 2025, the deferred loss recorded within the cumulative translation adjustment component of accumulated other comprehensive income (loss) in the consolidated balance sheet is $23 million (deferred loss of $23 million in the consolidated statement of comprehensive income for the year ended December 31, 2025), which is largely offset by an offsetting loss or gain on the underlying foreign net investment being hedged. The amount of net interest income recorded in 2025 and 2024 for all forward exchange contracts was $62 million and $6 million, respectively.
Effects of Previous Hedge Designations
As of December 31, 2025, exchange rate movements relating to previously designated hedges that remain in accumulated other comprehensive income (loss) is a loss of $86 million. These movements will remain in accumulated other comprehensive income (loss), until appropriate, such as upon sale or liquidation of the related foreign operations at which time amounts will be reclassified to the consolidated statements of income.
Interest Rate Swaps
Linde has historically used interest rate swaps to hedge the exposure to changes in the fair value of financial assets and financial liabilities as a result of interest rate changes. When used, these interest rate swaps would effectively convert fixed-rate interest exposures to variable rates; fair value adjustments were recognized in earnings along with an equally offsetting charge/benefit to earnings for the changes in the fair value of the underlying financial asset or financial liability (see Note 11).
Derivatives Impact on Consolidated Statements of Income
The following table summarizes the impact of the company's derivatives on the consolidated statements of income:
| (Millions of dollars) | **Amount of Pre-Tax Gain (Loss) Recognized in Earnings *** | ||||||||||||||||
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Derivatives Not Designated as Hedging Instruments | |||||||||||||||||
| Currency contracts: | |||||||||||||||||
| Balance sheet items: | |||||||||||||||||
| Debt-related | $ | (65) | $ | 88 | $ | 91 | |||||||||||
| Other balance sheet items | 6 | — | (1) | ||||||||||||||
| Total | $ | (59) | $ | 88 | $ | 90 |
- The gains (losses) on balance sheet items are offset by gains (losses) recorded on the underlying hedged assets and liabilities. Accordingly, the gains (losses) for the derivatives and the underlying hedged assets and liabilities related to debt-related items are recorded in the consolidated statements of income as interest expense-net. Other balance sheet items gains (losses) are recorded in the consolidated statements of income as other income (expenses)-net.
The amounts of gain or loss recognized in accumulated other comprehensive income (loss) and reclassified to the consolidated statements of income were not material for the years ended December 31, 2025, 2024, and 2023. Net impacts expected to be reclassified to earnings during the next twelve months are also not material.
NOTE 13. FAIR VALUE DISCLOSURES
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:
Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 – inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and 2024:
| Fair Value Measurements Using | |||||||||||||||||||||||||||||||||||
| (Millions of dollars) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Derivative assets | $ | — | $ | — | $ | 117 | $ | 306 | $ | — | $ | — | |||||||||||||||||||||||
| Investments and securities * | 20 | 16 | — | — | 13 | 12 | |||||||||||||||||||||||||||||
| Total | $ | 20 | $ | 16 | $ | 117 | $ | 306 | $ | 13 | $ | 12 | |||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Derivative liabilities | $ | — | $ | — | $ | 74 | $ | 101 | $ | — | $ | — |
*Investments and securities are recorded in prepaid and other current assets and other long-term assets in the company's consolidated balance sheets.
Level 1 investments and securities are marketable securities traded on an exchange. Level 2 investments are based on market prices obtained from independent brokers or determined using quantitative models that use as their basis readily observable market parameters that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. Level 3 investments and securities consist of a venture fund. For the valuation, Linde uses the net asset value received as part of the fund's quarterly reporting, which for the most part is not based on quoted prices in active markets. In order to reflect current market conditions, Linde proportionally adjusts these by observable market data (stock exchange prices) or current transaction prices.
Changes in Level 3 investments and securities were immaterial.
The fair value of cash and cash equivalents, short-term debt, accounts receivable-net, and accounts payable approximate carrying value because of the short-term maturities of these instruments.
The fair value of long-term debt is estimated based on the quoted market prices for the same or similar issues. Long-term debt is categorized within Level 2 of the fair value hierarchy. At December 31, 2025, the estimated fair value of Linde’s long-term debt portfolio was $21,064 million versus a carrying value of $22,479 million. At December 31, 2024, the estimated fair value of Linde’s long-term debt portfolio was $16,234 million versus a carrying value of $17,400 million. Differences between the carrying value and the fair value are attributable to fluctuations in interest rates subsequent to when the debt was issued and relative to stated coupon rates.
NOTE 14. EQUITY AND NONCONTROLLING INTERESTS
Linde plc Shareholders’ Equity
On March 1, 2023, in connection with the shareholder approved intercompany reorganization that resulted in the delisting of old Linde plc from the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange (FSE), and the subsequent relisting of new Linde plc to the NYSE, Linde shareholders automatically received one share of the new holding company in exchange for each share of Linde plc that was previously owned. The company issued 490,766,972 new Linde shares. Linde plc's historical treasury shares were immediately canceled which resulted in an approximate $15 billion decrease in treasury shares and retained earnings in Shareholders' Equity. On November 7, 2023, Linde plc transferred the listing of its ordinary shares from the NYSE to the Nasdaq, and continued trading under the ticker symbol "LIN".
At December 31, 2025 and 2024, Linde has total authorized share capital of €1,825,000 divided into 1,750,000,000 ordinary shares of €0.001 each, 25,000 A ordinary shares of €1.00 each, 25,000 deferred shares of €1.00 each and 25,000,000 preferred shares of €0.001 each.
At December 31, 2025 there were 490,766,972 and 463,680,942 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2025 there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding.
At December 31, 2024 there were 490,766,972 and 473,236,732 of Linde plc ordinary shares issued and outstanding, respectively. At December 31, 2024, there were no shares of A ordinary shares, deferred shares or preferred shares issued or outstanding.
Linde’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series.
Other Linde plc Ordinary Share and Treasury Share Transactions
Linde may issue new ordinary shares for dividend reinvestment and stock purchase plans and employee savings and incentive plans. No new ordinary shares were issued in 2025, 2024 and 2023.
On February 28, 2022, the company's board of directors authorized a new share repurchase program for up to $10.0 billion of its ordinary shares ("2022 program") under which Linde had repurchased 29,552,394 shares through December 31, 2024. Linde completed the repurchases under this program in the second quarter of 2024.
On October 23, 2023, the company's board of directors approved a new share repurchase program for up to $15.0 billion of its ordinary shares ("2023 program") under which Linde has repurchased $7.7 billion as of December 31, 2025. This program will terminate on the earlier of the date as the maximum authority under the 2023 program is reached or the board terminates the 2023 program.
Noncontrolling Interests
Noncontrolling interest ownership changes are presented within the consolidated statements of equity.
Redeemable Noncontrolling Interests
Noncontrolling interests with redemption features, such as put/sell options, that are not solely within the company’s control (“redeemable noncontrolling interests”) are reported separately in the consolidated balance sheets at the greater of carrying value or redemption value. For redeemable noncontrolling interests that are not yet exercisable, Linde calculates the redemption value by accreting the carrying value to the redemption value over the period until exercisable. If the redemption value is greater than the carrying value, any increase is adjusted directly to retained earnings and does not impact net income. At December 31, 2025 and 2024, the redeemable noncontrolling interest balance includes an industrial gas business in EMEA where the noncontrolling shareholders have put options.
NOTE 15. SHARE-BASED COMPENSATION
Share-based compensation expense was $164 million in 2025 ($160 million and $141 million in 2024 and 2023, respectively). The related income tax benefit recognized was $85 million in 2025 ($88 million in 2024 and 2023). The expense was primarily recorded in selling, general and administrative expenses and no share-based compensation expense was capitalized.
Summary of Plans
The 2021 Linde plc Long Term Incentive Plan (the “2021 Plan") was adopted by the Board of Directors and shareholders of Linde plc on July 26, 2021. The 2021 Plan permits awards of stock options, stock appreciation rights, restricted stock and restricted stock units, performance-based stock units and other equity awards to eligible officer and non-officer employees and non-employee directors of the company and its affiliates. As of December 31, 2025, 6,496,096 shares remained available for equity grants under the 2021 Plan, of which 1,875,605 shares may be granted as awards other than options or stock appreciation rights.
Exercise prices for options granted under the 2021 Plan may not be less than the closing market price of the company’s ordinary shares on the date of grant and granted options may not be re-priced or exchanged without shareholder approval. Options granted under the 2021 Plan subject only to time vesting requirements may become partially exercisable after a minimum of one year after the date of grant but may not become fully exercisable until at least three years have elapsed from the date of grant, and all options have a maximum duration of ten years.
In order to satisfy option exercises and other equity grants, the company may issue authorized but previously unissued shares or it may issue treasury shares.
Stock Option Fair Value
The company utilizes the Black-Scholes Options-Pricing Model to determine the fair value of stock options consistent with that used in prior years. Management is required to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e., expected volatility) and option exercise activity (i.e., expected life). Expected volatility is based on the historical volatility of the company’s stock over the most recent period commensurate with the estimated expected life of the company’s stock options and other factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based primarily on historical exercise experience. The expected dividend yield is based on the company’s most recent history and expectation of dividend payouts. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions in future periods, the stock option expense that the company records for future grants may differ significantly from what the company has recorded in the current period.
The weighted-average fair value of options granted during 2025 was $110.50 ($112.63 in 2024 and $83.69 in 2023) based on the Black-Scholes Options-Pricing model. The decrease in the grant date fair value year-over-year is primarily attributable to a lower expected volatility.
The following weighted-average assumptions were used to value the grants in 2025, 2024 and 2023:
| Year Ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Dividend yield | 1.3 | % | 1.2 | % | 1.4 | % | |||||||||||
| Volatility | 21.9 | % | 22.5 | % | 22.0 | % | |||||||||||
| Risk-free interest rate | 4.05 | % | 4.01 | % | 4.23 | % | |||||||||||
| Expected term years | 5 | 5 | 5 | ||||||||||||||
The following table summarizes option activity under the plans as of December 31, 2025 and changes during the period then ended (averages are calculated on a weighted basis; life in years; intrinsic value expressed in millions):
| Activity | Number of Options (000’s) | Average Exercise Price | Average Remaining Life | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding at January 1, 2025 | 5,023 | $ | 204.50 | ||||||||||||||||||||
| Granted | 317 | 468.77 | |||||||||||||||||||||
| Exercised | (842) | 146.09 | |||||||||||||||||||||
| Cancelled or expired | (18) | 407.03 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 4,480 | $ | 233.38 | 4.4 | $ | 889 | |||||||||||||||||
| Exercisable at December 31, 2025 | 3,865 | $ | 199.39 | 3.7 | $ | 881 |
The aggregate intrinsic value represents the difference between the company’s closing stock price of $426.39 as of December 31, 2025 and the exercise price multiplied by the number of in the money options outstanding as of that date. The total intrinsic value of stock options exercised during 2025 was $267 million ($327 million and $283 million in 2024 and 2023, respectively).
Cash received from option exercises under all share-based payment arrangements for 2025 was $23 million ($31 million and $33 million in 2024 and 2023, respectively). The cash tax benefit realized from share-based compensation totaled $82 million for 2025 ($89 million and $86 million cash tax benefit in 2024 and 2023, respectively).
As of December 31, 2025, $22 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 1 year.
Performance-Based and Restricted Stock Unit Awards
In 2025, the company granted 237,584 performance-based stock unit awards under the 2021 Plan to senior management that vest, subject to the attainment of pre-established minimum performance criteria, principally on the third anniversary of their date of grant. These awards are tied to either after tax return on capital ("ROC") performance or relative total shareholder return ("TSR") performance versus that of a blended group of companies that is comprised of the S&P 500, excluding the Financial sector, and Eurofirst 300. The actual number of shares issued in settlement of a vested award can range from zero to 200 percent of the target number of shares granted based upon the company’s attainment of specified performance targets at the end of a three-year period. Compensation expense related to these awards is recognized over the
three-year performance period based on the fair value of the closing market price of the company’s ordinary shares on the date of the grant and the estimated performance that will be achieved. Compensation expense for ROC awards will be adjusted during the three-year performance period based upon the estimated performance levels that will be achieved. TSR awards are measured at their grant date fair value and not subsequently re-measured. The number of performance-based stock unit awards granted in 2025 includes an increase of 123,718 stock units to the target number of performance-based awards originally granted in 2021, as these awards achieved a higher payout factor upon completion of the three-year performance period.
The weighted-average fair value of ROC awards granted in 2025 was $452.75 ($450.53 in 2024 and $340.80 in 2023). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period.
The weighted-average fair value of TSR awards granted in 2025 was $653.41 ($664.77 in 2024 and $489.33 in 2023) and was estimated using a Monte Carlo simulation performed as of the grant date.
There were 137,008 restricted stock units granted to employees by Linde during 2025. The weighted-average fair value of restricted stock units granted during 2025 was $450.68 ($449.10 in 2024 and $332.69 in 2023). These fair values are based on the closing market price of Linde's ordinary shares on the grant date adjusted for dividends that will not be paid during the vesting period. Compensation expense related to the restricted stock units is recognized over the vesting period.
The following table summarizes non-vested performance-based and restricted stock unit award activity as of December 31, 2025 and changes during the period then ended (shares based on target amounts, averages are calculated on a weighted basis):
| Performance-Based | Restricted Stock | ||||||||||||||||||||||
| Number of Shares (000’s) | Average Grant Date Fair Value | Number of Shares (000’s) | Average Grant Date Fair Value | ||||||||||||||||||||
| Non-vested at January 1, 2025 | 558 | $ | 339.50 | 591 | $ | 271.59 | |||||||||||||||||
| Granted | 237 | 550.48 | 137 | 450.68 | |||||||||||||||||||
| Vested | (272) | 274.73 | (149) | 252.66 | |||||||||||||||||||
| Cancelled and Forfeited | (6) | 534.96 | (13) | 411.61 | |||||||||||||||||||
| Non-vested at December 31, 2025 | 517 | $ | 403.69 | 566 | $ | 316.24 |
There are approximately 8 thousand performance-based stock units and 13 thousand restricted stock units that are non-vested at December 31, 2025 which will be settled in cash due to foreign regulatory limitations. The liability related to these grants reflects the current estimate of performance that will be achieved and the current share price.
As of December 31, 2025, $55 million of unrecognized compensation cost related to performance-based awards and $51 million of unrecognized compensation cost related to the restricted stock unit awards is expected to be recognized primarily through the first quarter of 2028.
NOTE 16. RETIREMENT PROGRAMS
Defined Benefit Pension Plans - U.S.
The Linde retirement plans are non-contributory defined benefit plans covering eligible employees and its participating affiliates. Effective July 1, 2002, the Linde U.S. Pension Plan was amended to give participating employees a one-time irrevocable choice between a traditional benefit (the “Traditional Design”) and an account-based benefit (the “Account-Based Design”). The Traditional Design pays a monthly benefit based on years of service and average pay during the last years of the participant’s career with Linde. The Account-Based Design gives participants annual pay credits equal to 4% of eligible compensation, plus interest credits based on long-term treasury rates on the accumulated account balance. This new formula applies to all new employees hired after April 30, 2002 into businesses adopting this plan. The U.S. pension plan assets are comprised of a diversified mix of investments, including corporate equities, government securities and corporate debt securities. Linde has several plans that provide supplementary retirement benefits primarily to higher level employees that are unfunded and are nonqualified for federal tax purposes. Pension coverage for employees of certain of Linde’s non-U.S. subsidiaries generally is provided by those companies through separate plans. Obligations under such plans are primarily provided for through diversified investment portfolios, with some smaller plans provided for under insurance policies or by book reserves.
Defined Benefit Pension Plans - Non-U.S.
Linde has Non-U.S., defined benefit commitments primarily in Germany and the U.K that include pension plan assets comprised of a diversified mix of investments. The defined benefit commitments in Germany relate to old age pensions, invalidity pensions and surviving dependents pensions. These commitments also take into account vested rights for periods of service prior to January 1, 2002 based on earlier final-salary pension plan rules. In addition, there are direct commitments in respect of the salary conversion scheme for the form of cash balance plans. The resulting pension payments are calculated on the basis of an interest guarantee and the performance of the corresponding investment. There are no minimum funding requirements. The pension obligations in Germany are partly funded by a Contractual Trust Agreement. Defined benefit commitments in the U.K. prior to July 1, 2003 are earnings-related and dependent on the period of service. Such commitments relate to old age pensions, invalidity pensions and surviving dependents pensions. Beginning in April 1, 2011, the amount of future increases in inflation-linked pensions and of increases in pensionable emoluments was restricted.
Multi-employer Pension Plans
In the United States Linde participates in eight multi-employer defined benefit pension plans ("MEPs"), pursuant to the terms of collective bargaining agreements, that cover approximately 200 union-represented employees. The collective bargaining agreements expire on different dates through 2030. In connection with such agreements, the company is required to make periodic contributions to the MEPs in accordance with the terms of the respective collective bargaining agreements. Linde’s participation in these plans is not material either at the plan level or in the aggregate. For all MEPs, Linde’s contributions were less than 1% of the total contributions to each plan for 2025, 2024 and 2023.
Linde has obtained the most recently available Pension Protection Act ("PPA") annual funding notices from the Trustees of the MEPs. As of December 31, 2025, there were four Red Zone plans, deemed to be in "critical" or "critical and declining" status that have implemented financial improvement or rehabilitation plans. Linde does not currently anticipate significant future obligations due to the funding status of these plans and any such obligation would be immaterial. If Linde determined it was probable that it would withdraw from an MEP, the company would record a liability for its portion of the MEP’s unfunded pension obligations, as calculated at that time. Historically, such withdrawal payments have not been significant.
Defined Contribution Plans
Linde’s U.S. employees are eligible to participate in defined contribution savings plans offered by their applicable business. Employee contribution percentages vary by plan and are subject to the maximum allowable by IRS regulations. The cost for these defined contribution plans was $70 million in 2025, $69 million in 2024 and $59 million in 2023 (these costs are not included in the tables that follow).
The defined contribution plans include a non-leveraged employee stock ownership plan ("ESOP") which covers all employees participating in this plan. The collective number of shares of Linde ordinary shares in the ESOP totaled 1,468,183 at December 31, 2025.
Certain non-U.S. subsidiaries of the company also sponsor defined contribution plans where contributions are determined under various formulas. The expense for these plans was $67 million in 2025, $62 million in 2024 and $60 million in 2023 (these expenses are not included in the tables that follow).
Postretirement Benefits Other Than Pensions (OPEB)
Linde provides health care and life insurance benefits to certain eligible retired employees. These benefits are provided through various insurance companies and healthcare providers. The company does not currently fund its postretirement benefits obligations. Linde’s retiree plans may be changed or terminated by Linde at any time for any reason with no liability to current or future retirees.
Linde uses a measurement date of December 31 for its pension and other postretirement benefit plans.
Pension and Postretirement Benefit Costs
The components of net pension and postretirement benefits other than pension ("OPEB") costs for 2025, 2024 and 2023 are shown in the table below:
| (Millions of dollars) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Amount recognized in Operating Profit | |||||||||||||||||
| Service cost | $ | 82 | $ | 84 | $ | 84 | |||||||||||
| Amount recognized in Net pension and OPEB cost (benefit), excluding service cost | |||||||||||||||||
| Interest cost | 356 | 362 | 373 | ||||||||||||||
| Expected return on plan assets | (557) | (552) | (523) | ||||||||||||||
| Net amortization and deferral | (30) | (10) | (30) | ||||||||||||||
| Settlement charges (a) | 2 | 10 | 16 | ||||||||||||||
| $ | (229) | $ | (190) | $ | (164) | ||||||||||||
| Net periodic benefit cost (benefit) | $ | (147) | $ | (106) | $ | (80) |
(a) Settlement charges were triggered by lump sum benefit payments.
Funded Status
Changes in the benefit obligation and plan assets for Linde’s pension and OPEB programs, including reconciliation of the funded status of the plans to amounts recorded in the consolidated balance sheet, as of December 31, 2025 and 2024 are shown below.
| (Millions of dollars) | Year Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||
| Change in Benefit Obligation ("PBO") | |||||||||||||||||||||||
| Benefit obligation, January 1 | $ | 2,090 | $ | 5,486 | $ | 2,187 | $ | 6,385 | |||||||||||||||
| Service cost | 28 | 54 | 28 | 56 | |||||||||||||||||||
| Interest cost | 104 | 252 | 103 | 259 | |||||||||||||||||||
| Participant contributions | 8 | 17 | 11 | 18 | |||||||||||||||||||
| Actuarial loss (gain) | 79 | 9 | (73) | (622) | |||||||||||||||||||
| Benefits paid | (160) | (347) | (155) | (348) | |||||||||||||||||||
| Plan settlement | (5) | (27) | (11) | (14) | |||||||||||||||||||
| Foreign currency translation and other changes | — | 539 | — | (248) | |||||||||||||||||||
| Benefit obligation, December 31 | $ | 2,144 | $ | 5,983 | $ | 2,090 | $ | 5,486 | |||||||||||||||
| Accumulated benefit obligation ("ABO") | $ | 2,018 | $ | 5,891 | $ | 1,964 | $ | 5,405 | |||||||||||||||
| Change in Plan Assets | |||||||||||||||||||||||
| Fair value of plan assets, January 1 | $ | 2,176 | $ | 5,950 | $ | 2,050 | $ | 6,178 | |||||||||||||||
| Actual return on plan assets | 283 | 387 | 267 | 271 | |||||||||||||||||||
| Company contributions | — | 25 | — | 35 | |||||||||||||||||||
| Participant contributions | — | 17 | — | 18 | |||||||||||||||||||
| Benefits paid from plan assets | (146) | (333) | (141) | (321) | |||||||||||||||||||
| Foreign currency translation and other changes | — | 552 | — | (231) | |||||||||||||||||||
| Fair value of plan assets, December 31 | $ | 2,313 | $ | 6,598 | $ | 2,176 | $ | 5,950 | |||||||||||||||
| Funded Status, End of Year | $ | 169 | $ | 615 | $ | 86 | $ | 464 | |||||||||||||||
| Recorded in the Balance Sheet (Note 7) | |||||||||||||||||||||||
| Other long-term assets | $ | 293 | $ | 1,005 | $ | 212 | $ | 894 | |||||||||||||||
| Other current liabilities | (17) | (24) | (16) | (21) | |||||||||||||||||||
| Other long-term liabilities | (107) | (366) | (110) | (409) | |||||||||||||||||||
| Net amount recognized, December 31 | $ | 169 | $ | 615 | $ | 86 | $ | 464 | |||||||||||||||
| Amounts recognized in accumulated other comprehensive income (loss) consist of: | |||||||||||||||||||||||
| Net actuarial loss (gain) | $ | 35 | $ | (233) | $ | 91 | $ | (256) | |||||||||||||||
| Prior service cost (credit) | (8) | — | (9) | — | |||||||||||||||||||
| Deferred tax obligation (benefit) (Note 7) | (7) | 109 | (21) | 116 | |||||||||||||||||||
| Amount recognized in accumulated other comprehensive income (loss) (Note 7) | $ | 20 | $ | (124) | $ | 61 | $ | (140) |
Comparative funded status information as of December 31, 2025 and 2024 for select non-U.S. pension plans is presented in the table below as the benefit obligations of these plans are considered to be significant relative to the total benefit obligation:
| United Kingdom | Germany | Other Non-U.S. | Total Non-U.S. | ||||||||||||||||||||
| (Millions of dollars) | 2025 | 2025 | 2025 | 2025 | |||||||||||||||||||
| Benefit obligation, December 31 | $ | 3,213 | $ | 1,690 | $ | 1,080 | $ | 5,983 | |||||||||||||||
| Fair value of plan assets, December 31 | 3,979 | 1,624 | 995 | 6,598 | |||||||||||||||||||
| Funded Status, End of Year | $ | 766 | $ | (66) | $ | (85) | $ | 615 | |||||||||||||||
| United Kingdom | Germany | Other Non-U.S. | Total Non-U.S. | ||||||||||||||||||||
| (Millions of dollars) | 2024 | 2024 | 2024 | 2024 | |||||||||||||||||||
| Benefit obligation, December 31 | $ | 2,883 | $ | 1,594 | $ | 1,009 | $ | 5,486 | |||||||||||||||
| Fair value of plan assets, December 31 | 3,640 | 1,418 | 892 | 5,950 | |||||||||||||||||||
| Funded Status, End of Year | $ | 757 | $ | (176) | $ | (117) | $ | 464 |
The changes in plan assets and benefit obligations recognized in other comprehensive income in 2025 and 2024 are as follows:
| Pensions | |||||||||||
| (Millions of dollars) | 2025 | 2024 | |||||||||
| Current year net actuarial losses (gains)* | $ | (25) | $ | (681) | |||||||
| Amortization of net actuarial gains (losses) | 29 | 9 | |||||||||
| Amortization of prior service credits (costs) | 1 | 1 | |||||||||
| Pension settlements | (2) | (10) | |||||||||
| Foreign currency translation and other changes | (35) | 7 | |||||||||
| Total recognized in other comprehensive income | $ | (32) | $ | (674) |
- In 2025, pension net actuarial gains were primarily driven by favorable plan asset experience, partially offset by losses from discount rate changes.
In 2024, the net actuarial gains arose due to rising discount rates across both regions which lowered PBO, supplemented by favorable plan asset experience for the U.S. plans.
The following table provides information only for those individual pension plans where the accumulated benefit obligation exceeds the fair value of plan assets:
| (Millions of dollars) Year Ended December 31, | Pensions | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||
| Accumulated benefit obligation ("ABO") | $ | 44 | $ | 678 | $ | 44 | $ | 1,746 | |||||||||||||||
| Fair value of plan assets | $ | — | $ | 347 | $ | — | $ | 1,384 |
The following table provides information only for those individual pension plans where the projected benefit obligation exceeds the fair value of plan assets:
| (Millions of dollars) Year Ended December 31, | Pensions | ||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||
| Projected benefit obligation ("PBO") | $ | 49 | $ | 711 | $ | 47 | $ | 1,796 | |||||||||||||||
| Fair value of plan assets | $ | — | $ | 354 | $ | — | $ | 1,391 |
Assumptions
The assumptions used to determine benefit obligations are as of the respective balance sheet dates and the assumptions used to determine net benefit cost are as of the previous year-end, as shown below:
| Pensions | |||||||||||||||||||||||
| U.S. | Non-U.S. | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Weighted average assumptions used to determine benefit obligations at December 31, | |||||||||||||||||||||||
| Discount rate | 5.27 | % | 5.55 | % | 4.96 | % | 4.76 | % | |||||||||||||||
| Interest crediting rate | 4.74 | % | 4.68 | % | 1.32 | % | 1.11 | % | |||||||||||||||
| Rate of increase in compensation levels | 3.50 | % | 3.50 | % | 2.53 | % | 2.55 | % | |||||||||||||||
| Weighted average assumptions used to determine net periodic benefit cost for years ended December 31, | |||||||||||||||||||||||
| Discount rate | 5.55 | % | 5.03 | % | 4.76 | % | 4.27 | % | |||||||||||||||
| Interest crediting rate | 4.68 | % | 4.03 | % | 1.11 | % | 1.70 | % | |||||||||||||||
| Rate of increase in compensation levels | 3.50 | % | 3.50 | % | 2.55 | % | 2.58 | % | |||||||||||||||
| Expected long-term rate of return on plan assets (1) | 7.00 | % | 7.00 | % | 6.01 | % | 6.02 | % |
(1) The expected long term rate of return on the U.S. and non-U.S. plan assets is estimated based on the plans' investment strategy and asset allocation, historical capital market performance and, to a lesser extent, historical plan performance.
For the U.S. plans, the expected rate of return of 7.00% was derived based on the target asset allocation of 50%-70% equity securities (approximately 7.00% expected return), 20%-50% fixed income securities (approximately 4.80% expected return) and 2%-8% alternative investments (approximately 6.00% expected return). For the main non-U.S. plans, the expected rate of return was derived based on the weighted average target asset allocation of 20%-40% equity securities (approximately 5.60% expected return), 30%-50% fixed income securities (approximately 5.00% expected return), and 5%-25% alternative investments (approximately 6.20% expected return).
For the U.S. plan assets, the actual annualized total return for the most recent 10-year period ended December 31, 2025 was approximately 8.60%. For the non-U.S. plan assets, the actual annualized total return for the same period was approximately 4.30%. Changes to plan asset allocations and investment strategy over this time period limit the value of historical plan performance as a factor in estimating the expected long term rate of return. For 2026, the expected long-term rate of return on plan assets will be 7.00% for the U.S. plans and 6.01% for non-U.S. plans.
Pension Plan Assets
The investments of the U.S. pension plan are managed to meet the future expected benefit liabilities of the plan over the long term by investing in diversified portfolios consistent with prudent diversification and historical and expected capital market returns. Investment strategies are reviewed by management and investment performance is tracked against appropriate benchmarks. There are no concentrations of risk as it relates to the assets within the plans. The non-U.S. pension plans are managed individually based on diversified investment portfolios, with different target asset allocations that vary for each plan. Weighted-average asset allocations at December 31, 2025 and 2024 for Linde’s U.S. and non-U.S. pension plans, as well as respective asset allocation ranges by major asset category, are generally as follows:
| U.S. | Non-U.S. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset Category | Target 2025 | Target 2024 | 2025 | 2024 | Target 2025 | Target 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities | 50% | - | 70% | 50% | - | 70% | 66% | 62% | 20% | - | 40% | 15% | - | 25% | 32% | 24% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed income securities | 20% | - | 50% | 20% | - | 50% | 29% | 31% | 30% | - | 50% | 30% | - | 50% | 35% | 29% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 2% | - | 8% | 2% | - | 8% | 5% | 7% | 5% | - | 25% | 30% | - | 50% | 33% | 47% |
The following table summarizes pension assets measured at fair value by asset category at December 31, 2025 and 2024. Transfers of assets were not material for the year ended December 31, 2025 and 2024. See Note 13 for the definition of levels within the fair value hierarchy:
| Fair Value Measurements Using | |||||||||||||||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | **Level 3 **** | Total | ||||||||||||||||||||||||||||||||||||||||||||
| (Millions of dollars) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 315 | $ | 407 | $ | — | $ | — | $ | — | $ | — | $ | 315 | $ | 407 | |||||||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Global equities | 4 | 1,149 | — | — | — | — | 4 | 1,149 | |||||||||||||||||||||||||||||||||||||||
| Mutual funds | 1,129 | 344 | — | — | — | — | 1,129 | 344 | |||||||||||||||||||||||||||||||||||||||
| Fixed income securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Government bonds | — | — | 1,052 | 1,304 | — | — | 1,052 | 1,304 | |||||||||||||||||||||||||||||||||||||||
| Emerging market debt | — | — | 291 | 294 | — | — | 291 | 294 | |||||||||||||||||||||||||||||||||||||||
| Mutual funds | — | 130 | 279 | 61 | — | — | 279 | 191 | |||||||||||||||||||||||||||||||||||||||
| Corporate bonds | — | — | 659 | 401 | — | — | 659 | 401 | |||||||||||||||||||||||||||||||||||||||
| Bank loans | — | — | 9 | 25 | — | — | 9 | 25 | |||||||||||||||||||||||||||||||||||||||
| Alternative investments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate funds | — | — | — | — | 337 | 314 | 337 | 314 | |||||||||||||||||||||||||||||||||||||||
| Private debt | — | — | — | — | 1,071 | 1,048 | 1,071 | 1,048 | |||||||||||||||||||||||||||||||||||||||
| Insurance contracts | — | — | — | — | 64 | 54 | 64 | 54 | |||||||||||||||||||||||||||||||||||||||
| Liquid alternatives | — | — | 780 | 1,087 | — | — | 780 | 1,087 | |||||||||||||||||||||||||||||||||||||||
| Other investments | 1 | 2 | 27 | 23 | — | — | 28 | 25 | |||||||||||||||||||||||||||||||||||||||
| Total plan assets at fair value, December 31, | $ | 1,449 | $ | 2,032 | $ | 3,097 | $ | 3,195 | $ | 1,472 | $ | 1,416 | $ | 6,018 | $ | 6,643 | |||||||||||||||||||||||||||||||
| Pooled funds * | 2,893 | 1,483 | |||||||||||||||||||||||||||||||||||||||||||||
| Total fair value plan assets December 31, | $ | 8,911 | $ | 8,126 |
- Pooled funds are measured using the net asset value ("NAV") as a practical expedient for fair value as permissible under the accounting standard for fair value measurements and have not been categorized in the fair value hierarchy.
** The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the periods ended December 31, 2025 and 2024:
| (Millions of dollars) | Insurance Contracts | Real Estate Funds | Private Debt | Total | |||||||||||||||||||
| Balance, December 31, 2023 | $ | 51 | $ | 324 | $ | 1,345 | $ | 1,720 | |||||||||||||||
| Gain/(Loss) for the period | 3 | 10 | (12) | 1 | |||||||||||||||||||
| Purchases | 4 | 28 | — | 32 | |||||||||||||||||||
| Sales | — | (37) | (255) | (292) | |||||||||||||||||||
| Transfer into/ (out of) Level 3 | — | — | — | — | |||||||||||||||||||
| Foreign currency translation | (4) | (11) | (30) | (45) | |||||||||||||||||||
| Balance, December 31, 2024 | 54 | 314 | 1,048 | 1,416 | |||||||||||||||||||
| Gain/(Loss) for the period | 1 | 35 | (14) | 22 | |||||||||||||||||||
| Purchases | 3 | — | 5 | 8 | |||||||||||||||||||
| Sales | — | (34) | (61) | (95) | |||||||||||||||||||
| Transfer into / (out of) Level 3 | — | — | — | — | |||||||||||||||||||
| Foreign currency translation | 6 | 22 | 93 | 121 | |||||||||||||||||||
| Balance, December 31, 2025 | $ | 64 | $ | 337 | $ | 1,071 | $ | 1,472 |
The descriptions and fair value methodologies for the company's pension plan assets are as follows:
Cash and Cash Equivalents – This category includes cash and short-term interest bearing investments with maturities of three months or less. Investments are valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy.
Equity Securities – This category is comprised of shares of common stock in U.S. and non-U.S. companies from a diverse set of industries and size. Common stock is valued at the closing market price reported on a U.S. or non-U.S. exchange where the security is actively traded. Equity securities are classified within level 1 of the valuation hierarchy.
Mutual Funds – These categories consist of publicly and privately managed funds that invest primarily in marketable equity and fixed income securities. The fair value of these investments is determined by reference to the net asset value of the underlying securities of the fund. Shares of publicly traded mutual funds are valued at the net asset value quoted on the exchange where the fund is traded and are primarily classified as level 1 within the valuation hierarchy.
Emerging Market Debt - This category includes fixed income debt issued by countries with developing economies as well as by corporations within those nations. They typically have higher yields but lower credit ratings relative to developed country corporate and government bonds. The fair values for these investments are classified as level 2 within the valuation hierarchy.
U.S. and Non-U.S. Government Bonds – This category includes U.S. treasuries, U.S. federal agency obligations and non-U.S. government debt. The majority of these investments do not have quoted market prices available for a specific government security and so the fair value is determined using quoted prices of similar securities in active markets and is classified as level 2 within the valuation hierarchy.
Corporate Bonds – This category is comprised of corporate bonds of U.S. and non-U.S. companies from a diverse set of industries and size. The fair values for U.S. and non-U.S. corporate bonds are determined using quoted prices of similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are classified as level 2 within the valuation hierarchy.
Pooled Funds - Pooled fund NAVs are provided by the trustee and are determined by reference to the fair value of the underlying securities of the trust, less its liabilities, which are valued primarily through the use of directly or indirectly observable inputs. Depending on the pooled fund, underlying securities may include marketable equity securities or fixed income securities.
Bank Loans - This category is comprised of traded syndicated loans of larger corporate borrowers. Such loans are issued by sub-investment grade rated companies both in the U.S. and internationally and are syndicated by investment banks to institutional investors. They are regularly traded in an active dealer market comprised of large investment banks, which supply bid and offer quotes and are therefore classified within level 2 of the valuation hierarchy.
Liquid Alternative Investments - This category is comprised of investments in alternative mutual funds whose holdings include liquid securities, cash, and derivatives. Such funds focus on diversification and employ a variety of investing strategies including long/short equity, multi-strategy, and global macro. The fair value of these investments is determined by reference to the net asset value of the underlying holdings of the fund, which can be determined using observable data (e.g., indices, yield curves, quoted prices of similar securities), and is classified within level 2 of the valuation hierarchy.
Insurance Contracts – This category is comprised of purchased annuity insurance contracts (annuity contract buy-ins) and is intended to mitigate the Company's exposure to certain risks, such as longevity risk. The fair value is calculated based on the cash surrender value of the purchased annuity insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flows. These contracts are with highly rated insurance companies. Insurance contracts are classified within level 3 of the valuation hierarchy.
Real Estate Funds – This category includes real estate properties, partnership equities and investments in operating companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions as well as other financial and industry data. The fair value for these investments are classified within level 3 of the valuation hierarchy.
Private Debt - This category includes non-traded, privately-arranged loans between one or a small group of private debt investment managers and corporate borrowers, which are typically too small to access the syndicated market and have no credit rating. This category also includes similar loans to real estate companies or individual properties. Loans included
in this category are valued at par value, are held to maturity or to call, and are classified within level 3 of the valuation hierarchy.
Contributions
At a minimum, Linde contributes to its pension plans to comply with local regulatory requirements (e.g., ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made based on many factors, including long-term projections of the plans' funded status, the economic environment, potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors can impact the timing of discretionary contributions from year to year. Pension contributions were $25 million in 2025, $35 million in 2024 and $46 million in 2023. Estimated required contributions for 2026 are currently expected to be in the range of $25 million to $35 million.
Estimated Future Benefit Payments
The following table presents estimated future benefit payments, net of participant contributions:
| (Millions of dollars) | Pensions | ||||||||||
| Year Ended December 31, | U.S. | Non-U.S. | |||||||||
| 2026 | $ | 217 | $ | 406 | |||||||
| 2027 | 167 | 508 | |||||||||
| 2028 | 166 | 407 | |||||||||
| 2029 | 168 | 413 | |||||||||
| 2030 | 170 | 424 | |||||||||
| Thereafter | 843 | 2,247 |
NOTE 17. COMMITMENTS AND CONTINGENCIES
The company accrues non income-tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized or realizable. In the event any losses are sustained in excess of accruals, they will be charged against income at that time. Attorney fees are recorded as incurred. Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the company’s balance sheet as liabilities. The company records liabilities for commitments when incurred (i.e., when the goods or services are received).
Contingent Liabilities
Linde is subject to various lawsuits and government investigations that arise from time to time in the ordinary course of business. These actions are based upon alleged environmental, tax, antitrust and personal injury claims, among others. Linde has strong defenses in these cases and intends to defend itself vigorously. It is possible that the company may incur losses in connection with some of these actions in excess of accrued liabilities. Management does not anticipate that in the aggregate such losses would have a material adverse effect on the company’s consolidated financial position or liquidity; however, it is possible that the final outcomes could have a significant impact on the company’s reported results of operations in any given period.
Significant matters are:
-
During 2009, the Brazilian government published Law 11941/2009 instituting a new voluntary amnesty program (“Refis Program”) which allowed Brazilian companies to settle certain federal tax disputes at reduced amounts. During 2009, the company decided that it was economically beneficial to settle many of its outstanding federal tax disputes and such disputes were enrolled in the Refis Program, subject to final calculation and review by the Brazilian federal government. The company recorded estimated liabilities based on the terms of the Refis Program. Since 2009, Linde has been unable to reach final agreement on the calculations and initiated litigation against the government in an attempt to resolve certain items. Open issues relate to the following matters: (i) application of cash deposits and net operating loss carryforwards to satisfy obligations and (ii) the amount of tax reductions available under the Refis Program. It is difficult to estimate the timing of resolution of legal matters in Brazil.
-
On and after April 23, 2019 former shareholders of Linde AG filed appraisal proceedings at the District Court (Landgericht) Munich I (Germany), seeking an increase of the cash consideration paid in connection with the previously completed cash merger squeeze-out of all of Linde AG’s minority shareholders for €189.46 per share. Any such increase would apply to all 14,763,113 Linde AG shares that were outstanding on April 8, 2019, when the cash merger squeeze-out was completed. The period for plaintiffs to file claims expired on July 9, 2019. In
November 2023, the court issued a decision rejecting the plaintiffs’ claims in their entirety and determining that the cash merger squeeze-out consideration was appropriate. The plaintiffs have appealed this decision.
The company believes the consideration paid was fair and that the claims are not supported by sufficient evidence, and no reserve has been established. We cannot estimate the timing of resolution.
- On May 27, 2022, performance of all Linde Engineering agreements in Russia were lawfully suspended in compliance with applicable sanctions. In December 2022, at RusChemAlliance’s (RCA) request a Russian St. Petersburg court (“St. Petersburg Court”) issued an injunction preventing sale of Linde Russia subsidiaries and assets. Since then, in accordance with the dispute resolution provisions of the related engineering agreements Linde secured judgments reenforcing jurisdiction of the agreements with RCA outside of Russia and ordering the St. Petersburg proceedings stayed and injunctions lifted. However, RCA has continued to pursue its claims in Russia and during 2024 two Linde Russian joint ventures were sold locally pursuant to a St. Petersburg court order and the proceeds provided to RCA. Linde does not expect a material adverse impact on earnings given the combined $1.9 billion liabilities recorded as of December 31, 2025 and the immaterial investment value of its remaining deconsolidated Russia subsidiaries. Please see further detail on the Russian legal cases below.
RCA LNG and GPP
In December 2022, the St. Petersburg Court issued an injunction preventing (i) the sale of any shares in Linde’s subsidiaries and joint ventures in Russia, and (ii) the disposal of any of the assets in those entities exceeding 5% of the relevant company’s overall asset value. RusChemAlliance is owned 50% by PJSC Gazprom. The injunction was requested by RCA to secure payment of a possible award under an arbitration proceeding RCA intended to file against Linde Engineering for alleged breach of contract under the agreement to build a gas processing plant in Russia entered into in July 2021. In 2023, RCA filed a claim in St. Petersburg against Linde GmbH for recovery of advance payments under the agreement ("GPP Claim"), and subsequently (i) added Linde and other Linde subsidiaries as defendants, and (ii) is seeking payment of alleged damages from Linde and guarantor banks. In 2024, RCA filed a similar claim for repayment and damages against Linde for alleged breach of contract under the agreement to build a liquefied natural gas plant in Russia entered into in September 2021 (“LNG Claim”, and together with the GPP Claim, the “Russian Claims”).
Dispute resolution provisions
In accordance with the dispute resolution provisions of the agreements, in 2023, Linde filed a notice of arbitration with the Hong Kong International Arbitration Centre ("HKIAC") against RCA to claim that (i) RCA has no entitlement to payment, (ii) RCA’s Russian Claims are in breach of the arbitration agreement which requires HKIAC arbitration, and (iii) RCA must compensate Linde for the losses and damages caused by the injunction. During 2024, Linde secured awards on exclusive jurisdiction with HKIAC.
In January 2024, the Hong Kong court issued a final judgment in Linde’s favor (i) granting a permanent anti-suit injunction against RCA to seek a stay of the GPP claim and not start an LNG claim, (ii) granting a permanent, global anti-enforcement injunction against RCA for the GPP claim, and (iii) ordering that the injunction issued by the St. Petersburg Court be lifted (“HK Court Judgement”).
Despite the judgments of the Hong Kong court and similar orders issued by the HKIAC arbitration tribunals, RCA is continuing to pursue its claims in Russia and neither the St. Petersburg injunction affecting Linde’s shares and assets has been lifted, nor the proceeding in St. Petersburg been stayed. The HKIAC arbitration proceedings are ongoing.
Local seizures
During 2024, the St. Petersburg Court decided the GPP Claim in favor of RCA (the “GPP Decision”) and later that year, decided the LNG Claim in favor of RCA (the “LNG Decision”). Linde unsuccessfully appealed the GPP Decision in 2024. During the fourth quarter of 2024, RCA executed enforcement actions related to the GPP Decision within Russia for Linde’s shares in two Linde Russian joint ventures and locally RCA received payment from the purchase of these shares by Linde’s joint venture partners. RCA previously initiated the enforcement process for the GPP Decision within Russia for the remainder of Linde’s local assets, and these proceedings are currently ongoing.
Linde intends to claim all damages related to or rising from RCA's enforcement of the GPP and LNG Decisions in the HKIAC arbitration proceedings. Linde subsidiaries affected by the GPP Decision have also filed claims for damages against RCA and/or its controlling shareholder in the Southern District of New York, the Netherlands and Germany.
As of December 31, 2025, Linde has a contingent liability of $1.2 billion, which represents advance payments previously recorded in contract liabilities related to terminated engineering projects with RCA. As a result of the contract terminations, Linde no longer has future performance obligations for these projects.
It is difficult to estimate the timing of resolution of these matters. The company intends to vigorously defend its interests in the Russian Claims, Hong Kong arbitration proceedings and other jurisdictions.
Amur GPP
In July 2015, Gazprom Pererabotka Blagoveshchensk LLC ("Gazprom"), a 100% subsidiary of PJSC Gazprom, entered into an engineering, procurement and construction contract with OJSC NIPIgazpererabotka ("Nipigas") for the construction of a gas processing plant and other components located in the Amur Region, Russia (“Amur GPP”). Subsequently, in December 2015, Nipigas and Linde Engineering, executed a subcontract for engineering, procurement, and site services ("EPSS Contract") for licensed production units for the Amur GPP project. Additionally, Linde also entered into (i) a license agreement with Gazprom in 2017 for the operation of the plants, and (ii) a direct owner agreement with Gazprom and Nipigas ("DOA") which included limitation of liability provisions. Performance of the Amur GPP agreements were lawfully suspended in compliance with applicable sanctions on May 27, 2022.
On October 8, 2021 and January 5, 2022, fires occurred at the Amur GPP facility. Following the initial fire in 2021, Linde undertook a comprehensive review of the incident, including a detailed local inspection conducted by Linde employees. The Linde report concluded that the fire was attributable to the quality of construction and assembly work, responsibilities falling under the scope of Nipigas.
On October 29, 2024, Gazprom submitted a claim to the Arbitration State Court in the Amur Region, Russia (“Amur Court”) against Linde Engineering and project-unrelated Linde entities claiming damages and lost profits arising from the fire incidents.
During 2025, Linde Engineering formally initiated arbitration proceedings against Gazprom before the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) in Stockholm, Sweden, as provided for in the DOA.
As of December 31, 2025, Linde has a contingent liability of $0.7 billion for this and other Amur GPP contract matters. It is difficult to estimate the timing of resolution of this matter. The company intends to vigorously defend its interests in this case.
Commitments
At December 31, 2025, Linde had undrawn outstanding letters of credit, bank guarantees and surety bonds valued at approximately $3.5 billion from financial institutions. These relate primarily to customer contract performance guarantees (including plant construction in connection with certain on-site contracts), self-insurance claims and other commercial and governmental requirements, including non-U.S. litigation matters.
Other commitments related to leases, tax liabilities for uncertain tax positions, long-term debt, other post retirement and pension obligations are summarized elsewhere in the financial statements (see Notes 4, 5, 11, and 16).
NOTE 18. SEGMENT INFORMATION
Linde’s operations consist of two major product lines: industrial gases and engineering. As further described in the following paragraph, Linde’s industrial gases operations are managed on a geographic basis, which represent three of the company's reportable segments - Americas, EMEA (Europe/Middle East/Africa), and APAC (Asia/South Pacific); a fourth reportable segment, which represents the company's Engineering business, designs and manufactures equipment for air separation and other industrial gas applications specifically for end customers and is managed on a worldwide basis operating in all three geographic segments. Other consists of corporate costs and a few smaller businesses, which individually do not meet the quantitative thresholds for separate presentation.
The industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, acetylene). Many of these products are co-products of the same manufacturing process. Linde manufactures and distributes nearly all of its products and manages its customer relationships on a regional basis. Linde’s industrial gases are distributed to various end-markets within a regional segment through one of three basic distribution methods: on-site or tonnage; merchant or bulk; and packaged or cylinder gases. The distribution methods are generally integrated in order to best meet the customer’s needs and very few of its products can be economically transported outside of a region. Therefore,
the distribution economics are specific to the various geographies in which the company operates and are consistent with how management assesses performance.
The CODM consists of the CEO, COO, CFO and senior or executive vice president of each respective segment. The company’s measure of profit/loss for segment reporting is segment operating profit. Segment operating profit is defined as operating profit excluding purchase accounting impacts of the Linde AG merger, cost reduction and other charges, and items not indicative of ongoing business trends. The CODM uses operating profit to assess overall segment performance, which includes monitoring opportunities for growth and to make capital decisions across the respective segments, while assessing both industry and macroeconomic conditions. Total assets have not been included as this is not provided to the CODM for their assessment.
The table below presents information about reportable segments for the years ended December 31, 2025, 2024 and 2023.
| (Millions of dollars) | Americas | EMEA | APAC | Engineering | Other | Total | ||||||||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||||||||
| Sales (a) | $ | 15,208 | $ | 8,549 | $ | 6,661 | $ | 2,250 | $ | 1,318 | $ | 33,986 | ||||||||||||||||||||||||||
| Variable Costs (b) | 5,763 | 2,943 | 3,270 | 853 | 484 | 13,313 | ||||||||||||||||||||||||||||||||
| Fixed Costs and other (c) | 3,194 | 1,870 | 784 | 957 | 745 | 7,550 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization (d) | 1,504 | 681 | 674 | 32 | 95 | 2,986 | ||||||||||||||||||||||||||||||||
| Operating Profit (e) | 4,747 | 3,055 | 1,933 | 408 | (6) | 10,137 | ||||||||||||||||||||||||||||||||
| Expenditures for long-lived assets | $ | 3,428 | $ | 729 | $ | 1,177 | $ | 35 | $ | 304 | $ | 5,673 | ||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||||||||
| Sales (a) | $ | 14,442 | $ | 8,352 | $ | 6,632 | $ | 2,322 | $ | 1,257 | $ | 33,005 | ||||||||||||||||||||||||||
| Variable Costs (b) | 5,375 | 3,129 | 3,304 | 920 | 408 | 13,136 | ||||||||||||||||||||||||||||||||
| Fixed Costs and other (c) | 3,067 | 1,803 | 769 | 959 | 694 | 7,292 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization (d) | 1,450 | 640 | 641 | 33 | 93 | 2,857 | ||||||||||||||||||||||||||||||||
| Operating Profit (e) | 4,550 | 2,780 | 1,918 | 410 | 62 | 9,720 | ||||||||||||||||||||||||||||||||
| Expenditures for long-lived assets | $ | 2,805 | $ | 702 | $ | 1,059 | $ | 25 | $ | 223 | $ | 4,814 | ||||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||||||||
| Sales (a) | $ | 14,304 | $ | 8,542 | $ | 6,559 | $ | 2,160 | $ | 1,289 | $ | 32,854 | ||||||||||||||||||||||||||
| Variable Costs (b) | 5,524 | 3,614 | 3,317 | 676 | 433 | 13,564 | ||||||||||||||||||||||||||||||||
| Fixed Costs and other (c) | 3,113 | 1,802 | 803 | 960 | 717 | 7,395 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization (d) | 1,423 | 640 | 633 | 33 | 96 | 2,825 | ||||||||||||||||||||||||||||||||
| Operating Profit (e) | 4,244 | 2,486 | 1,806 | 491 | 43 | 9,070 | ||||||||||||||||||||||||||||||||
| Expenditures for long-lived assets | $ | 2,999 | $ | 635 | $ | 975 | $ | 24 | $ | 107 | $ | 4,740 |
(a)Sales reflect external sales only. Intersegment sales from Engineering to the industrial gases segments, were $2,702 million, $1,958 million and $1,479 million for the year ended December 31, 2025, 2024 and 2023, respectively. Intersegment sales from Helium, were $436 million, $477 million, $509 million for the year ended December 31, 2025, 2024 and 2023, respectively.
(b)Variable costs represents the variable portion of cost of sales, exclusive of depreciation and amortization.
(c)Fixed costs and other represent the fixed portion of cost of sales (exclusive of depreciation and amortization), selling, general and administrative, research and development and other income (expenses) - net.
(d)Refer to the reconciliation of depreciation and amortization to consolidated results below.
(e)Refer to the reconciliation of operating profit to consolidated results below.
Reconciliations to Consolidated Results
Depreciation and Amortization
The table below reconciles total depreciation and amortization disclosed in the table above to consolidated depreciation and amortization as reflected on our consolidated statements of income:
| (Millions of dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total segment depreciation and amortization | $ | 2,986 | $ | 2,857 | $ | 2,825 | ||||||||||||||
| Purchase accounting impacts - Linde AG (a) | 777 | 923 | 991 | |||||||||||||||||
| Total depreciation and amortization | $ | 3,763 | $ | 3,780 | $ | 3,816 |
(a)To adjust for purchase accounting impacts related to the merger.
Income Before Income Taxes and Equity Investments
The table below reconciles total operating profit disclosed in the table above to consolidated income before income taxes and equity investments as reflected on our consolidated statements of income:
| (Millions of dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| Total segment operating profit | $ | 10,137 | $ | 9,720 | $ | 9,070 | ||||||||||||||
| Cost reduction program and other charges | 273 | 145 | 40 | |||||||||||||||||
| Purchase accounting impacts - Linde AG (a) | 941 | 940 | 1,006 | |||||||||||||||||
| Interest expense - net | 255 | 256 | 200 | |||||||||||||||||
| Net pension and OPEB cost (benefit), excluding service cost | (229) | (190) | (164) | |||||||||||||||||
| Total consolidated income before income taxes and equity investments | $ | 8,897 | $ | 8,569 | $ | 7,988 |
(a)To adjust for purchase accounting impacts related to the merger.
Geographic Information
The geographic information presented below is based on country of origin.
Sales by Major Country
| (Millions of dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 12,182 | $ | 11,497 | $ | 10,566 | ||||||||||||||
| China | 2,600 | 2,649 | 2,585 | |||||||||||||||||
| Germany (a) | 2,432 | 2,509 | 2,827 | |||||||||||||||||
| United Kingdom | 1,510 | 1,540 | 1,507 | |||||||||||||||||
| Australia | 1,287 | 1,354 | 1,303 | |||||||||||||||||
| Mexico | 1,391 | 1,346 | 1,292 | |||||||||||||||||
| Brazil | 1,325 | 1,263 | 1,302 | |||||||||||||||||
| Other – non-U.S. | 11,259 | 10,847 | 11,472 | |||||||||||||||||
| Total Sales | $ | 33,986 | $ | 33,005 | $ | 32,854 |
(a)Sales in Germany include Engineering sales to third parties, locally and internationally, which represent 25%, 28% and 35% of Germany sales in 2025, 2024 and 2023, respectively.
Long-lived Assets
| (Millions of dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 11,229 | $ | 9,663 | $ | 8,490 | ||||||||||||||
| China | 2,129 | 2,022 | 2,063 | |||||||||||||||||
| Germany | 1,550 | 1,386 | 1,584 | |||||||||||||||||
| Brazil | 896 | 738 | 836 | |||||||||||||||||
| Mexico | 852 | 704 | 768 | |||||||||||||||||
| United Kingdom | 718 | 668 | 684 | |||||||||||||||||
| Australia | 621 | 573 | 654 | |||||||||||||||||
| Other – non-U.S. | 10,265 | 9,021 | 9,473 | |||||||||||||||||
| Total long-lived assets (a) | $ | 28,260 | $ | 24,775 | $ | 24,552 |
(a)Long-lived assets include property, plant and equipment - net.
NOTE 19. REVENUE RECOGNITION
Revenue is accounted for in accordance with ASC 606. Revenue is recognized as control of goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled to receive in exchange for the goods or services.
Contracts with Customers
Linde serves a diverse group of industries including healthcare, chemicals and energy, manufacturing, metals and mining, food and beverage, and electronics.
Industrial Gases
Within each of the company’s geographic segments for industrial gases, there are three basic distribution methods: (i) on-site or tonnage; (ii) merchant or bulk liquid; and (iii) packaged or cylinder gases. The distribution method used by Linde to supply a customer is determined by many factors, including the customer’s volume requirements and location. The distribution method generally determines the contract terms with the customer and, accordingly, the revenue recognition accounting practices. Linde's primary products in its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (hydrogen, helium, carbon dioxide, carbon monoxide, electronic gases, specialty gases, acetylene). These products are generally sold through one of the three distribution methods.
Following is a description of each of the three industrial gases distribution methods and the respective revenue recognition policies:
On-site. Customers that require the largest volumes of product and that have a relatively constant demand pattern are supplied by cryogenic and process gas on-site plants. Linde constructs plants on or adjacent to these customers’ sites and supplies the product directly to customers by pipeline. Where there are large concentrations of customers, a single pipeline may be connected to several plants and customers. On-site product supply contracts generally are total requirement contracts with terms typically ranging from 10-20 years and contain minimum purchase requirements and price escalation provisions. Many of the cryogenic on-site plants also produce liquid products for the merchant market. Therefore, plants are typically not dedicated to a single customer. Additionally, Linde is responsible for the design, construction, operations and maintenance of the plants and our customers typically have no involvement in these activities. Advanced air separation processes also allow on-site delivery to customers with smaller volume requirements.
The company’s performance obligations related to on-site customers are satisfied over time as customers receive and obtain control of the product. Linde has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the company has the right to invoice each customer, which generally corresponds with product delivery. Accordingly, revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms. Consideration in these contracts is generally based on pricing which fluctuates with various price indices. Variable components of consideration exist within on-site contracts but are considered constrained.
Merchant. Merchant deliveries generally are made from Linde's plants by tanker trucks to storage containers at the customer's site. Due to the relatively high distribution cost, merchant oxygen and nitrogen generally have a relatively small distribution radius from the plants at which they are produced. Merchant argon, hydrogen and helium can be shipped much longer distances. The customer agreements used in the merchant business are usually three to seven year supply agreements based on the requirements of the customer. These contracts generally do not contain minimum purchase requirements or volume commitments.
The company’s performance obligations related to merchant customers are generally satisfied at a point in time as the customers receive and obtain control of the product. Revenue is recognized when product is delivered to the customer and the company has the right to invoice the customer in accordance with the contract terms.
Packaged Gases. Customers requiring small volumes are supplied products in containers called cylinders, under medium to high pressure. Linde distributes merchant gases from its production plants to company-owned cylinder filling plants where cylinders are then filled for distribution to customers. Cylinders may be delivered to the customer’s site or picked up by the customer at a packaging facility or retail store. Linde invoices the customer for the industrial gases and the use of the cylinder container(s). The company also sells hardgoods and welding equipment purchased from independent manufacturers. Packaged gases are generally sold under one to three-year supply contracts and purchase orders and do not contain minimum purchase requirements or volume commitments.
The company’s performance obligations related to packaged gases are satisfied at a point in time. Accordingly, revenue is recognized when product is delivered to the customer or when the customer picks up product from a packaged gas facility or retail store, and the company has the right to payment from the customer in accordance with the contract terms.
Engineering
The company designs and manufactures equipment for air separation and other industrial gas applications manufactured specifically for end customers. Sale of equipment contracts are generally comprised of a single performance obligation. Revenue from sale of equipment is generally recognized over time as Linde has an enforceable right to payment for performance completed to date and performance does not create an asset with alternative use. For contracts recognized over time, revenue is recognized primarily using a cost incurred input method. Costs incurred to date relative to total estimated costs at completion are used to measure progress toward satisfying performance obligations. Costs incurred include material, labor, and overhead costs and represent work contributing and proportionate to the transfer of control to the customer. Changes to cost estimates and contract modifications are typically accounted for as part of the existing contract and are recognized as cumulative adjustments for the inception-to-date effect of such change.
Contract Assets and Liabilities
Contract assets and liabilities result from differences in timing of revenue recognition and customer invoicing. Contract assets primarily relate to sale of equipment contracts for which revenue is recognized over time. The balance represents unbilled revenue which occurs when revenue recognized under the measure of progress exceeds amounts invoiced to customers. Customer invoices may be based on the passage of time, the achievement of certain contractual milestones or a combination of both criteria. Contract liabilities include advance payments or right to consideration prior to performance under the contract. Contract liabilities are recognized as revenue as performance obligations are satisfied under contract terms. Linde has contract assets of $336 million at December 31, 2025 (current contract assets of $269 million and $67 million within other long-term assets in the consolidated balance sheets). Total contract assets were $263 million at December 31, 2024, all classified as current contract assets in the consolidated balance sheets. Total contract liabilities are $2,515 million at December 31, 2025 (current contract liabilities of $1,231 million and $1,284 million within deferred credits in the consolidated balance sheets). Total contract liabilities were $2,292 million at December 31, 2024 (current contract liabilities of $1,194 million and $1,098 million within deferred credits in the consolidated balance sheets). Revenue recognized for the twelve months ended December 31, 2025 that was included in the contract liability at December 31, 2024 was $732 million. Contract assets and liabilities primarily relate to the Engineering business and customer prepayments for certain on-site supply agreements.
Payment Terms and Other
Linde generally receives payment after performance obligations are satisfied, and customer prepayments are not typical for the industrial gases business. Payment terms vary based on the country where sales originate and local customary payment practices. Linde does not typically offer extended financing outside of customary payment terms. Amounts billed for sales and use taxes, value-added taxes, and certain excise and other specific transactional taxes imposed on revenue producing transactions are presented on a net basis and are not included in sales within the consolidated statement of income. Additionally, sales returns and allowances are not a normal practice in the industry and are not significant.
Disaggregated Revenue Information
As described above and in Note 18, the company manages its industrial gases business on a geographic basis, while the Engineering and Other businesses are generally managed on a global basis. Furthermore, the company believes that reporting sales by distribution method by reportable geographic segment best illustrates the nature, timing, type of customer, and contract terms for its revenues, including terms and pricing.
The following tables show sales by distribution method at the consolidated level and for each reportable segment and Other for the years ended December 31, 2025, 2024 and 2023.
| (Millions of dollars) | Year Ended December 31, 2025 | ||||||||||||||||||||||
| Sales | Americas | EMEA | APAC | Engineering | Other | Total | % | ||||||||||||||||
| Merchant | $ | 4,892 | $ | 2,860 | $ | 2,213 | $ | — | $ | 194 | $ | 10,159 | 30 | % | |||||||||
| On-Site | 3,609 | 1,685 | 2,789 | — | — | 8,083 | 24 | % | |||||||||||||||
| Packaged Gas | 6,460 | 3,970 | 1,398 | — | 25 | 11,853 | 35 | % | |||||||||||||||
| Other | 247 | 34 | 261 | 2,250 | 1,099 | 3,891 | 11 | % | |||||||||||||||
| $ | 15,208 | $ | 8,549 | $ | 6,661 | $ | 2,250 | $ | 1,318 | $ | 33,986 | 100 | % | ||||||||||
| (Millions of dollars) | Year Ended December 31, 2024 | ||||||||||||||||||||||
| Sales | Americas | EMEA | APAC | Engineering | Other | Total | % | ||||||||||||||||
| Merchant | $ | 4,572 | $ | 2,765 | $ | 2,233 | $ | — | $ | 208 | $ | 9,778 | 30 | % | |||||||||
| On-Site | 3,239 | 1,722 | 2,695 | — | — | 7,656 | 23 | % | |||||||||||||||
| Packaged Gas | 6,414 | 3,805 | 1,376 | — | 28 | 11,623 | 35 | % | |||||||||||||||
| Other | 217 | 60 | 328 | 2,322 | 1,021 | 3,948 | 12 | % | |||||||||||||||
| $ | 14,442 | $ | 8,352 | $ | 6,632 | $ | 2,322 | $ | 1,257 | $ | 33,005 | 100 | % | ||||||||||
| (Millions of dollars) | Year Ended December 31, 2023 | ||||||||||||||||||||||
| Sales | Americas | EMEA | APAC | Engineering | Other | Total | % | ||||||||||||||||
| Merchant | $ | 4,370 | $ | 2,773 | $ | 2,242 | $ | — | $ | 218 | $ | 9,603 | 29 | % | |||||||||
| On-Site | 3,246 | 1,980 | 2,599 | — | — | 7,825 | 24 | % | |||||||||||||||
| Packaged Gas | 6,457 | 3,735 | 1,416 | — | 46 | 11,654 | 35 | % | |||||||||||||||
| Other | 231 | 54 | 302 | 2,160 | 1,025 | 3,772 | 12 | % | |||||||||||||||
| $ | 14,304 | $ | 8,542 | $ | 6,559 | $ | 2,160 | $ | 1,289 | $ | 32,854 | 100 | % |
Remaining Performance Obligations
As described above, Linde's contracts with on-site customers are under long-term supply arrangements which generally require the customer to purchase their requirements from Linde and also have minimum purchase requirements. Additionally, plant sales from the Linde Engineering business are primarily contracted on a fixed price basis. As of December 31, 2025, the company estimates the consideration related to future minimum purchase requirements and plant sales was approximately $62 billion. This amount excludes all on-site sales above minimum purchase requirements, which can be significant depending on customer needs. In the future, actual amounts will be different due to impacts from several factors, many of which are beyond the company’s control including, but not limited to, timing of newly signed, terminated and renewed contracts, inflationary price escalations, currency exchange rates, and pass-through costs related to natural gas and electricity. The actual duration of long-term supply contracts ranges up to thirty years. The company estimates that approximately half of the revenue related to minimum purchase requirements will be earned in the next six years and the remaining thereafter.
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